Could one-off loan losses at US regional banks become systemic?
Investors bet Zions, Western Alliance are isolated problems, but credit risk managers are nervous
On October 16, shares in Zions and Western Alliance slid sharply after both banks disclosed loan losses tied to distressed commercial real estate deals. The borrowers – investment funds financing property acquisitions and linked to the same principal in both cases – are accused of misrepresenting collateral and shifting it to other entities after the loans were made. This alleged misconduct
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