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Crisis Narrative Forcing Out All Others in Bank-Obsessed Markets

  • SVB, Credit Suisse contagion fear ignites stock market turmoil
  • Treasury market volatility hits highest level since 2009

Is upheaval in the banking sector the prelude to a financial crisis, or just the biggest bump yet on the road to restoring order to the economy? Stock investors clinging to hopes this too shall pass are having their tolerance for pain severely tested.

Snowballing tensions over the banking sector, now gone global after Credit Suisse saw a quarter of its market value lopped off over five hours, torpedoed a nascent rally in equities Wednesday, as systemic risk in the financial system started to blot out the impulse to buy. While US equities pared back the worst of their losses, they still finished lower as warnings of contagion swirled.