NEW YORK ( TheStreet) -- For most of 2011, bank stock investors have asked themselves one question repeatedly as the European crisis deepened. Is this 2008 all over again?
Bank stocks have suffered their worst decline since 2008 as investors shoot first and ask questions later, with the SPDR Financial Select Sector (XLF) shedding nearly 25% year to date. The biggest banks have led the plunge, with the KBW Bank Index, a basket of 24 of the largest banks, declining 32% year-to-date.
Concerns over exposure to Europe, dismal capital market revenues, a harsher regulatory environment and an unprecedented downgrade of U.S. debt in August assailed the stocks of Bank of America (BAC), Morgan Stanley (MS) and Citigroup (C) which have shed 60%, 47% and 43% respectively in 2011.JPMorgan Chase (JPM) and Wells Fargo (WFC) declined by a lesser extent, falling by 20% and 29% respectively. Small-cap regional banks fared better, as did credit card companies and mortgage servicers. All data is as of Nov. 29. Bank stocks now trade at such deep discounts to historical valuations- many bluechip names trade below their book value- that
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