There are, in fact, plenty of reasons for investors to view the current high stock market valuations with skepticism — including the ongoing government shutdown in the U.S. and the trade dispute with China.

However, on Thursday, reports concerning U.S. regional banks triggered a sharper decline, particularly among bank stocks. The benchmark Dow Jones Industrial Average closed 0,65 percent lower at 45,952 points.

Major Banks Also Lost Value

Reports from the two regional banks, Zions Bancorp and Western Alliance Bancorp, caused unease, according to Bloomberg (article paywalled). Their shares plunged by 13 and 11 percent, respectively.

Major banks such as J.P. Morgan Chase (-2,3 percent), Bank of America (-3,5 percent), Wells Fargo (-2,9 percent), and Goldman Sachs (-1,3 percent) also lost value.

Small Sums – Big Impact

Zions and Western Alliance both reported losses related to lending activities. The amounts involved are relatively minor.

Utah-based Zions Bank, with total assets of around 89 billion dollar, set aside provisions amounting to 60 million dollar. The bank identified apparent misrepresentations and contract breaches involving two related commercial and industrial loans connected to two borrowers. Additional irregularities concerning the loans and collateral were also discovered. The bank has filed a lawsuit against the borrowers.

Growing Skepticism Over Corporate Loans

Separately, Western Alliance reported a lawsuit against a borrower over alleged fraud. Among other things, the case involves the borrower’s failure to provide collateral for loans. The bank is seeking to recover about 100 million dollar.

Compared with the bankruptcies of First Brands or Tricolor, these are indeed small cases. However, according to market participants, the sharp stock price reaction shows just how strong skepticism currently is regarding the corporate lending sector.