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London CNN  — 

JPMorgan Chase’s rescue of First Republic Bank in the United States this week didn’t herald the end of the banking crisis.

Investors have shifted their attention to other regional lenders, dumping shares of California’s PacWest (PACW), which is now exploring “all strategic options.” The bank’s stock is down 36% in pre-market trading on Thursday.

First Horizon (FHN) and TD Bank (TD)also called off a $13 billion deal Thursday that would have formed America’s sixth-largest bank. First Horizon (FHN)’s stock has plummeted about 40% in recent months, and it’s plunging further pre-market.

What’s happening: Tumult in the sector following Silicon Valley Bank’s collapse in March has put Wall Street on alert, ready to pounce at any sign of weakness.

Bank shares have struggled in this climate. The KBW Bank Index, which tracks leading US lenders, has plunged 32% since the beginning of March.

Yet across the Atlantic, losses have been much more limited. The Stoxx Europe 600 Banks Index, which tracks big EU and UK banks, has shed 14% over the same period. Year-to-date, European banks are up more than 3%, while US lenders are down 26%.

What accounts for the divergence? Analysts note that in Europe, the banking sector is much more consolidated, and most of its players run diversified businesses. They’re also subject to stricter regulation. That eases anxiety about the industry at a moment of heavy scrutiny.

“It’s really critical infrastructure for the European economy,” said Guillaume Menuet, Citi Private Bank’s head of investment strategy and economics in Europe, the Middle East and Africa. “The degree of oversight has always been larger.”

Depositors in Europe are also less likely to yank their money, Menuet said. Andrea Orcel, the CEO of Italy’s UniCredit (UNCFF), made this point on a call with analysts Wednesday after the bank reported earnings.

“Our deposit base is sticky, diversified, stable and high quality,” Orcel said.

Turmoil in the United States — which helped bring down Switzerland’s scandal-ridden Credit Suisse — is unlikely to infect other lenders in Europe, Orcel added.

“The economic shocks and unexpected fragility we have witnessed across the US and in Switzerland raised [questions] about both banks’ strengths and how they are operating day-to-day,” he said. “These were idiosyncratic and specific to a segment of our industry, with limited read-across to European banking.”

(Shares of UniCredit, which has been boosting shareholder rewards, are up 37% year-to-date.)

Broader market dynamics have also helped European bank stocks. Investors have shown greater willingness to buy European equities after shunning the region for some time. Improvements to the economic outlook at the start of the year, among other factors, have bolstered sentiment.

The European Central Bank, which meets Thursday, has also been slower than the US Federal Reserve to hike interest rates. That means banks are still in a sweet spot in which they can make more money off loans without having to meaningfully increase what they pay to their depositors, Menuet said.

Take note: Fed Chair Jerome Powell said Wednesday that the US banking sector remains solid.

“Conditions in the sector have broadly improved since early March, and the US banking system is sound and resilient,” he said. “We will continue to monitor conditions in the sector. We’re committed to learning the right lessons from this episode.”

But as regional banks continue to stumble, volatility in bank shares looks set to continue.

White House warns debt default could wipe out 8 million jobs

White House economists are warning that a protracted US debt default would cause the loss of more than 8 million jobs and cut the value of the stock market in half.

The new projections, published in a blog post by the White House Council of Economic Advisers, outline the enormous stakes behind a potential breach of the debt ceiling.

“A protracted default would likely lead to severe damage to the economy, with job growth swinging from its current pace of robust gains to losses numbering in the millions,” the White House economists said.

Remember: Treasury Secretary Janet Yellen said the US could default on its debt as soon as June 1 if Congress doesn’t act.

The report estimates the impact under three scenarios: brinksmanship, a short default and a protracted default. Even a brinksmanship scenario, where a default is avoided, would wipe out 200,000 jobs and knock 0.3 percentage points off annual gross domestic product, according to the Biden administration.

The White House projections are similar to ones made by Moody’s Analytics, which warned in March that a lengthy default could cost more than 7 million jobs.

Powell’s take: The Fed chair warned on Wednesday that the central bank would have limited bandwidth to save the US economy if an “unprecedented” default occurs.

“No one should assume that the Fed can protect the economy and financial system and our reputation from the damage that such an event might inflict,” he said.

Nearly half of Americans are worried about their savings

Banks are in the business of confidence. They take in money from depositors and lend it out to other households and businesses with interest. That means, however, that depositors can’t all demand their money back at once. If they do, the lender is in trouble.

Regulators know this set-up is fragile. They do what they can to avert bank runs as a result. Yet according to the results of a survey from Gallup released Thursday, Americans are edgy, adding to risks.

This just in: 48% of US adults said they were concerned about the money they deposit with banks and other financial institutions. While 29% said they were “moderately” worried, 19% identified as “very” worried.

The findings are similar to those from the 2008 financial crisis. In September of that year, after Lehman Brothers went bust, 45% of US adults said they were very, or moderately, worried about the safety of their money in banks.

The latest Gallup poll was conducted between April 3 and April 25, following the March collapse of Silicon Valley Bank but prior to the failure of First Republic Bank this week.