A months-long bank rally is now a rout. Bank executives and analysts say that is an overreaction given the system is much better equipped to handle stress and central banks have stepped in with more than US$200 billion of assistance.
Markets are grappling with a US$600 billion ($804.96 billion) question right now. Are the half-dozen banks in the spotlight outliers or a warning sign of a wider malaise in the financial sector?
Bank investors have largely been selling first and leaving that question for later. Around US$600 billion dollars of market value has evaporated from the 70 biggest US and European banks since March 6, a period that’s seen the collapse of Silicon Valley Bank, Credit Suisse Group AG receive a US$54 billion lifeline from the Swiss National Bank and a US$30 billion Wall Street whip-round for First Republic Bank.
