COINOTAG recommends • Exchange signup |
💹 Trade with pro tools |
Fast execution, robust charts, clean risk controls. |
👉 Open account → |
COINOTAG recommends • Exchange signup |
🚀 Smooth orders, clear control |
Advanced order types and market depth in one view. |
👉 Create account → |
COINOTAG recommends • Exchange signup |
📈 Clarity in volatile markets |
Plan entries & exits, manage positions with discipline. |
👉 Sign up → |
COINOTAG recommends • Exchange signup |
⚡ Speed, depth, reliability |
Execute confidently when timing matters. |
👉 Open account → |
COINOTAG recommends • Exchange signup |
🧭 A focused workflow for traders |
Alerts, watchlists, and a repeatable process. |
👉 Get started → |
COINOTAG recommends • Exchange signup |
✅ Data‑driven decisions |
Focus on process—not noise. |
👉 Sign up → |
Banking contagion risk is rising after the Tricolor and First Brands bankruptcies, which forced charge-offs and legal claims against lenders and asset managers; investors should watch loan-loss provisions, non-bank lending exposure, and regional bank balance sheets for further stress.
-
Immediate impact: Regional banks and lenders recorded charge-offs and legal claims tied to Tricolor and First Brands.
-
Market reaction: Zions fell ~13%, Western Alliance ~10%, and Jefferies dropped over 10% after exposure disclosures.
-
Systemic indicator: Non-bank lending is the leading driver of U.S. loan growth in 2025 (Federal Reserve data), raising contagion concerns.
Banking contagion risk rises after Tricolor and First Brands collapses; monitor regional bank charge-offs, loan provisions, and non-bank lending exposure. Read the latest analysis from COINOTAG.
By COINOTAG | Published: 2025-10-17 | Updated: 2025-10-17
COINOTAG recommends • Professional traders group |
💎 Join a professional trading community |
Work with senior traders, research‑backed setups, and risk‑first frameworks. |
👉 Join the group → |
COINOTAG recommends • Professional traders group |
📊 Transparent performance, real process |
Spot strategies with documented months of triple‑digit runs during strong trends; futures plans use defined R:R and sizing. |
👉 Get access → |
COINOTAG recommends • Professional traders group |
🧭 Research → Plan → Execute |
Daily levels, watchlists, and post‑trade reviews to build consistency. |
👉 Join now → |
COINOTAG recommends • Professional traders group |
🛡️ Risk comes first |
Sizing methods, invalidation rules, and R‑multiples baked into every plan. |
👉 Start today → |
COINOTAG recommends • Professional traders group |
🧠 Learn the “why” behind each trade |
Live breakdowns, playbooks, and framework‑first education. |
👉 Join the group → |
COINOTAG recommends • Professional traders group |
🚀 Insider • APEX • INNER CIRCLE |
Choose the depth you need—tools, coaching, and member rooms. |
👉 Explore tiers → |
What is banking contagion risk?
Banking contagion risk describes how losses at one borrower or non-bank counterparty can spread through lenders, asset managers, and markets. It occurs when unpaid loans, legal claims, or counterparty failures trigger charge-offs and investor panic, undermining credit intermediation and raising funding costs across the system.
How did the Tricolor and First Brands failures trigger market stress?
The collapses of Tricolor Holdings (a subprime auto lender) and First Brands (an auto parts supplier) produced direct credit losses and related legal actions that hit middle-tier banks and investment firms. Zions Bancorporation disclosed a $50 million charge-off tied to unpaid business loans in its California Bank & Trust division and reported discovery of related legal actions by other lenders. JPMorgan disclosed a $170 million wholesale lending charge-off linked to Tricolor, and a Jefferies asset management fund appears owed roughly $715 million by customers tied to First Brands, though Jefferies reported direct receivables of $43 million and $2 million in interest. These book losses, alongside legal uncertainty, prompted share-price declines and heightened scrutiny of non-bank lending exposures.
COINOTAG recommends • Exchange signup |
📈 Clear interface, precise orders |
Sharp entries & exits with actionable alerts. |
👉 Create free account → |
COINOTAG recommends • Exchange signup |
🧠 Smarter tools. Better decisions. |
Depth analytics and risk features in one view. |
👉 Sign up → |
COINOTAG recommends • Exchange signup |
🎯 Take control of entries & exits |
Set alerts, define stops, execute consistently. |
👉 Open account → |
COINOTAG recommends • Exchange signup |
🛠️ From idea to execution |
Turn setups into plans with practical order types. |
👉 Join now → |
COINOTAG recommends • Exchange signup |
📋 Trade your plan |
Watchlists and routing that support focus. |
👉 Get started → |
COINOTAG recommends • Exchange signup |
📊 Precision without the noise |
Data‑first workflows for active traders. |
👉 Sign up → |
Frequently Asked Questions
How exposed are regional banks to non-bank lending losses?
Regional banks show varying exposure. Some reported specific charge-offs (e.g., Zions $50M), while others face legal claims or indirect counterparty risk. The Federal Reserve notes non-bank lending is the largest contributor to loan growth in 2025, which increases vulnerability where underwriting or collateral standards are weaker.
Is the banking system safe after these bankruptcies?
Short answer: systemic safety is not yet compromised, but risks are elevated. Several institutions called the market reaction “overdone” (Jefferies executives), and analysts at KBW urged caution. Regulators and bank management teams will need to monitor provisions, counterparty networks, and non-bank channels closely.
COINOTAG recommends • Traders club |
⚡ Futures with discipline |
Defined R:R, pre‑set invalidation, execution checklists. |
👉 Join the club → |
COINOTAG recommends • Traders club |
🎯 Spot strategies that compound |
Momentum & accumulation frameworks managed with clear risk. |
👉 Get access → |
COINOTAG recommends • Traders club |
🏛️ APEX tier for serious traders |
Deep dives, analyst Q&A, and accountability sprints. |
👉 Explore APEX → |
COINOTAG recommends • Traders club |
📈 Real‑time market structure |
Key levels, liquidity zones, and actionable context. |
👉 Join now → |
COINOTAG recommends • Traders club |
🔔 Smart alerts, not noise |
Context‑rich notifications tied to plans and risk—never hype. |
👉 Get access → |
COINOTAG recommends • Traders club |
🤝 Peer review & coaching |
Hands‑on feedback that sharpens execution and risk control. |
👉 Join the club → |
Key Takeaways
- Direct losses matter: Charge-offs like JPMorgan’s $170M and Zions’ $50M are tangible hits that reduce bank capital cushions.
- Non-bank lending is the amplifier: Growth in non-bank credit is the primary driver of loan expansion in 2025 (Federal Reserve), increasing contagion pathways.
- Watch balance-sheet signals: Rising loan-loss provisions, legal filings, and sudden increases in funding costs are early indicators to monitor.
Conclusion
The Tricolor and First Brands bankruptcies have exposed banking contagion risk tied to non-bank lending channels and borrower credit quality. Regional banks and asset managers have already recorded charge-offs and legal disputes, prompting market volatility. Authorities and bank risk teams will need to track loan-loss provisions, counterparty claims, and funding conditions to prevent further transmission. COINOTAG will continue to monitor official data from the Federal Reserve and industry notes from KBW and Jefferies for developments.
Sources (plain text): Jamie Dimon (JPMorgan Chase), JPMorgan disclosures, Zions Bancorporation disclosures, Jefferies Financial Group filings, Federal Reserve data, KBW analyst notes, statements from Richard Handler and Brian Friedman, and comments from David Chiaverini (Jefferies).
COINOTAG recommends • Members‑only research |
📌 Curated setups, clearly explained |
Entry, invalidation, targets, and R:R defined before execution. |
👉 Get access → |
COINOTAG recommends • Members‑only research |
🧠 Data‑led decision making |
Technical + flow + context synthesized into actionable plans. |
👉 Join now → |
COINOTAG recommends • Members‑only research |
🧱 Consistency over hype |
Repeatable rules, realistic expectations, and a calmer mindset. |
👉 Get access → |
COINOTAG recommends • Members‑only research |
🕒 Patience is an edge |
Wait for confirmation and manage risk with checklists. |
👉 Join now → |
COINOTAG recommends • Members‑only research |
💼 Professional mentorship |
Guidance from seasoned traders and structured feedback loops. |
👉 Get access → |
COINOTAG recommends • Members‑only research |
🧮 Track • Review • Improve |
Documented PnL tracking and post‑mortems to accelerate learning. |
👉 Join now → |