Regional bank stocks staged their deepest retreat in three years on Monday, reflecting deepening investor concern about the health of the industry following three bank failures in the past week.
The KBW Nasdaq index of commercial banks dropped more than 10%, with large lenders such as Comerica Inc. CMA -23.48%decrease; red down pointing triangle and Zions Bancorp ZION -26.12%decrease; red down pointing triangle declining more than 20%. The SPDR S&P Regional Banking ETF KRE -10.55%decrease; red down pointing triangle dropped more than 15%, putting it on pace for its largest decline since 2008.
The retreat shows the extent to which investors continue to back away from banks with large amounts of uninsured deposits. Deposit flight was at the center of the collapse this past week of SVB Financial Corp., the parent of Silicon Valley Bank, and Signature Bank. Comerica said 64% of its deposits at the end of last year were uninsured and Zions 53%, filings show.
The Federal Reserve and the Biden administration took emergency steps Sunday to try to reassure Americans about the health of the financial system, but there were signs that investors remained concerned both about individual banks and about the likely economic impact of the tumult.
