Global bank stocks slide as US credit risks spark reality check

Global financial stocks slid on Friday as a rout in US regional banking shares heightened concerns about credit quality and mounting risks in the sector.

- ALUN JOHN & ANKUR BANERJEE

The banking sector’s exposure in two recent US auto bankruptcies has rekindled concerns about lending standards more than two years after Silicon Valley Bank's failure, when high interest rates drove paper losses on its bonds and sparked a global bankstocks rout.

Investors are now trying to assess whether recent issues in US credit markets will have a similar effect, as an overnight selloff on Wall Street rippled across Asia and Europe and shone a spotlight on the recent AI-led surge in broader stock markets that some fear could have created a bubble.

“What we see in the banks selling off overnight in the US, Asia wakes up to it, Europe wakes up to it, and so it spreads,” said TD Securities head of global macro strategy James Rossiter.