Compared with the dramatic collapses of First Brands Group and Tricolor Holdings, the revelations from regional lenders Zions Bancorp and Western Alliance Bancorp might, at first glance, appear trivial—mere tens of millions rather than the now-customary billions. Yet, these modest numbers have managed to reignite an old and uncomfortable question on Wall Street: has the long party of free-market excess finally reached the moment of reckoning for America’s banks—and their less-regulated shadow counterparts?

In both the Zions and Western Alliance debacles, the alleged culprits are hardly strangers to the industry. Investment funds tied to Andrew Stupin and Gerald Marcil allegedly borrowed millions to finance the purchase of distressed commercial mortgage loans. According to Zions’ own lawsuit, its subsidiary California Bank & Trust handed out $60 million to the pair, only to discover that much of the collateral had somehow wandered off to other entities. Stupin and Marcil, of course, “vehemently deny” all wrongdoing—a phrase now so overused in finance that it could almost be trademarked.

These revelations join a growing pile of corporate wreckage. The subprime auto lender Tricolor Holdings recently filed for bankruptcy, wiping out nearly all of its debt in what was politely termed a “restructuring.” Soon after came the demise of First Brands Group, an auto-parts supplier whose $10 billion debt mountain finally gave way—leaving some of Wall Street’s finest institutions grasping at air and metaphors.

While Zions and Western Alliance’s losses are, for now, financially insignificant, the market’s reaction was anything but. Shares of 74 major U.S. banks collectively lost over $100 billion in value on Thursday. It’s a familiar pattern: in this industry, investors—particularly the naïve ones—tend to sell first, rationalise later. And still, many are left wondering why these supposedly “isolated incidents” keep occurring in such suspicious synchrony. Coincidence? Perhaps. Or perhaps capitalism’s mythical self-correcting mechanism is finally awake and sharpening its knives.

Both banks declined to comment—an omission that, as experience teaches, often says more than any press release could.

One analyst summed up the mood with grim precision: “When you see one cockroach, there are probably others.” And indeed, the sight of one was enough to send Zions’ stock down 13%—its steepest drop in six months—after revealing a $50 million hit on a loan issued by California Bank & Trust. Western Alliance fell 11% after acknowledging exposure to the same merry band of borrowers.

Yet, the sector’s leadership remains eerily unruffled, or perhaps merely tranquilised by years of easy money. A telling sign lies in their third-quarter provisions for bad loans. JPMorgan prudently raised its buffer to $3.4 billion, while its five largest rivals collectively recorded their lowest provisioning in two years. Morgan Stanley, in a particularly zen display of confidence—or denial—didn’t add a single dollar.

So, either these titans of finance know something the rest of us don’t—or they’re simply whistling past the graveyard, pretending that the cockroach in the kitchen was an isolated pest rather than the herald of a wider infestation.