Credit Stress Could Threaten Wall Street’s Rally, Analysts Warn, As Regional Bank Stocks Plunge

Benzinga

Regional bank earnings reignited credit contagion fears after Zions and Western Alliance disclosed loan fraud, sending the KBW Bank Index to its worst day since April.

Transcript

00:00It's Benzinga, bringing Wall Street to Main Street.

00:03Earnings season has spotlighted risky lending among regional banks,

00:06rattling Wall Street and fueling fears of a credit contagion, according to Bloomberg.

00:11Shares of Zions Bancorp and Western Alliance Bancorp plunged after disclosing loan fraud

00:16tied to distressed mortgage funds, dragging the KBW Bank Index to its worst day since April.

00:22The sell-off came days after JPMorgan CEO Jamie Dimon warned of

00:25cockroaches in the credit market, citing recent loan failures.

00:30While major lenders like Bank of America and Goldman Sachs posted strong results,

00:34regional lenders face greater exposure to potential defaults.

00:37Analysts say any widening credit stress could pressure an already expensive stock market.

00:42For all things money, visit Benzinga.com.

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