US banking sector crisis hits major banks JPMorgan Chase, Jefferies Financial Group
Regional banks Zions Bancorp, Western Alliance detect commercial loan frauds, which lead to sell-offs in US banking stocks, as fear index surges to 6-month high
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BERLIN
The recent banking sector crisis in the US, following a commercial loan fraud scandal in regional banks Zions Bancorp and Western Alliance, led shares of major banks JPMorgan Chase and Jefferies Financial Group to tumble on Friday.
Shares of Utah-based Zions fell 13.1% on Thursday after it identified irregularities in two commercial loans and posted a $50 million loss to the US Securities and Exchange Commission (SEC).
Shares of Arizona-based Western Alliance lost 10.8% after it reported to the SEC that it had filed a lawsuit against a borrower for fraud.
Following the bad news, the KBW Regional Banking Index declined 6.3%.
Shares of JPMorgan Chase and Jefferies Financial Group fell 2.3% and 10.6%, respectively.
The banking and financial sector stocks’ sell-off affected US markets and investor perception.
The VIX Index or fear index, reflecting the volatility of the S&P 500, surged as high as 28.99, its highest level in about six months.
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