Yellen's suggestion of more bank mergers causes regional bank stocks to drop.

The KBW Regional Bank index slumped over 3% after a report that Treasury Secretary Janet Yellen told bank chief executives that more mergers may be necessary, raising the prospect that more regional banks would have to be bought by larger too-big-to-fail firms. The Treasury Department confirmed the meeting but did not include the point about the possible need for further mergers in its readout.