Fears about banks rising again

June 24, 2009 | By Jim Kim

The KBW Bank index has dropped 20 percent since capping in early May. An index of big banks' credit default swaps has meanwhile risen 17 percent. This could be mere market froth, but it does seem that after all the hullabaloo over the stress tests and all the news about banks paying back their TARP funds, the world is still quite worried about top banks.

Fortune notes that the fear this time around, is less about survival and more about earnings. So, in a sense, that is a measure of progress. My sense is that big banks have a lot of reserve action yet to take. Credit cards and commercial mortgage backed securities are the big worries. Many analysts have turned bullish on banks recently. They'll turn again in the face of negative data.

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