Bank Bonds Spreads Widest in 13 Years

March 23 (Bloomberg) –This month’s record rally in U.S. financial companies is in jeopardy, according to the bond market, where concern about bank failures is growing.

While the Standard & Poor’s 500 Financials Index of banks, brokerages and insurers surged as much as 54 percent from a 17- year low on March 6, bonds of the companies yield 8.55 percentage points more than Treasuries, about the widest in 13 years, according to Merrill Lynch & Co. indexes. The gap between yields of financial institutions’ bonds and Treasuries widened even as their stocks jumped.