A dramatic sell-off in U.S. bank stocks spilled over into Europe on Friday, as some of the region’s biggest banks saw their shares tumble in their largest decline in nine months.
Europe’s STOXX banking index (.SX7P) fell more than 4% and was set for its biggest one-day slide since early June, with declines for most major lenders, including HSBC (HSBA.L), down 4.5%, and Deutsche Bank (DBKGn.DE), down 7.9%.
Shares in Italy’s UniCredit (CRDI.MI) and Intesa Sanpaolo (ISP.MI) also fell sharply.
The global rout in bank stocks was prompted by Silicon Valley Bank, a major banking partner for the U.S. tech sector, being forced to raise fresh capital after losing $1.8 billion selling a package of bonds to meet depositor demands for cash.
Neil Wilson, Chief Market Analyst at Markets.com, said that the episode could be the “straw that breaks the camel’s back” for banks after worries about ever higher interest rates and a fragile U.S. economy.
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