AMERICAS DISTRESS DAILY: Regional Bank Losses Rekindle Fears

Loan fraud disclosures by regional lenders Zions Bancorp and Western Alliance Bancorp have renewed concerns about the banking industry’s exposure to credit risk. The alleged fraud involved investment funds tied to Andrew Stupin and Gerald Marcil, which borrowed funds to finance their purchase of distressed commercial mortgage loans.

• While the disclosed losses from the alleged fraud were relatively small, the reaction from stock investors was significant, with 74 of the biggest US banks shedding more than $100 billion in market value.

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