Deutsche Bank leads fresh tumble for bank stocks
STORY: Bank stocks tumbled again on Friday (March 24).
As the week ended, investors once more grew concerned that the crisis for lenders may not be contained.
That helped drive a down day for shares in Asia, and then saw Europe open in the red.
The regional STOXX 600 was down close to 2% in early trade.
Deutsche Bank led the way lower, falling as much as 13%.
Traders were alarmed by a jump in the cost of insuring its bonds against default.
Credit Suisse and UBS tumbled too, both falling around 7%.
Reports by Bloomberg suggest U.S. watchdogs are investigating the pair, among other banks, for helping Russian oligarchs evade sanctions.
That might complicate the rescue of Credit Suisse by UBS, which Swiss authorities want to push through in as little as a month.
This week has also seen volatility over the Federal Reserve’s move to hike rates again.
CapWealth Chairman Tim Pagliara says rising rates are the backdrop to everything that’s going on:
“Well I think that the market volatility that we are seeing today is just a reflection of the challenges that the Federal Reserve created by raising interest rates nine consecutive times in a short period of time. And so they have had to walk back some of the things they were doing.”
Uncertainty over the next steps by U.S. authorities may not be helping.
Treasury Secretary Janet Yellen has stopped short of saying what banks most want to hear - which is that Washington will guarantee every cent of the $19.2 trillion on deposit at U.S. lenders.