Banks and Investors Caution as First Brands Collapse Sparks Credit Concerns

Banks and financial stocks are showing signs of recovery after a recent selloff triggered by the bankruptcy of auto parts company First Brands and concerns over hidden bad loans in the banking sector. The market experienced heightened volatility, but some banks like Jefferies and Zions Bancorp are rebounding, suggesting the selloff may be overdone. The crisis fears stem from First Brands' off-balance-sheet debt and exposure of regional banks to fraudulent loans, raising worries about broader financial instability.