Why bank stocks are falling despite surging interest rates

Bank stocks are falling despite surging interest rates, as investors worry that rising funding costs could erode the profit margins that banks have enjoyed in recent years.

Banks typically benefit from higher interest rates, as they can charge more for loans while their own borrowing costs remain relatively low. However, if funding costs rise significantly, banks' profit margins could start to shrink.

Analysts say that the recent sell-off in bank stocks reflects concerns about the potential impact of higher interest rates on the sector's earnings.