The KBW Regional Bank index KRX, -2.71% slumped over 3%, after a report from CNN that Treasury Secretary Janet Yellen told bank chief executives than more mergers may be necessary. The CNN report, citing two people familiar with the matter, raises the prospect that more regional banks would have to be bought by larger too-big-to-fail firms. The Treasury Department confirmed the meeting on Thursday but its readout did not include the point about the possible need for further mergers.
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