Regional banks and Jefferies shares tank as concerns grow on Wall Street about sour loans

Core Viewpoint - Concerns are rising in the banking industry due to bad loans linked to bankruptcies in the auto sector, leading to significant stock declines for regional banks and investment banks like Jefferies [1][2][3]. Group 1: Stock Performance - Zions Bancorporation's shares dropped over 10%, while Western Alliance Bancorp fell more than 9% [1]. - The SPDR S&P Regional Banking ETF (KRE) lost more than 4%, with nearly all its members expected to end the session in the red [1]. - Jefferies' stock fell over 7% on Thursday and has lost approximately 23% in October, marking its worst month since March 2020 [3]. Group 2: Loan Concerns - The bankruptcies of First Brands and Tricolor Holdings have raised alarms about loose lending practices in the private credit market [2][3]. - Zions Bancorporation announced it would face a significant charge due to bad loans to certain borrowers [2]. - Western Alliance accused a borrower of committing fraud, further intensifying concerns [2]. Group 3: Financial Exposure - Jefferies reported that hedge funds it manages are owed $715 million from companies associated with First Brands, while UBS has about $500 million in exposure [4]. - JPMorgan CEO Jamie Dimon commented on the situation, suggesting that the presence of one issue may indicate more problems within the industry [4].