Jitters from Wall Street, sparked by regional bank fears, infected global markets, with the banking sector bearing the brunt of the sell-off. European lenders lost €37.4 billion as shares of Barclays, Deutsche Bank, and Banco Sabadell plunged.
The source of the anxiety was the disclosure of multi-million dollar bad loans at two US regional banks, Zions Bancorporation and Western Alliance. This news fueled concerns about a broader credit crunch in the world’s largest economy.
The panic also hit Asian markets, with the Nikkei and Hang Seng closing down 1.6% and 2%. Major European indices like the FTSE 100 and Dax also fell sharply.
Investors, fearing a repeat of the 2023 SVB crisis, moved into safe-haven assets. Gold prices hit a new all-time high of $4,378 an ounce. The VIX “fear index” also surged, indicating rising alarm.