Bank stocks continued their slide Thursday as investors fretted over weaker earnings and fresh reminders of the relationship between banks and hedge funds.

The day dawned with Bankers Trust Corp. revealing in a filing to the Securities and Exchange Commission that it has loaned $850 million to hedge funds secured by cash or U.S. Treasury securities. Beyond that, the banking company said, it has made "approximately $25 million" of unsecured loans to these high-risk investment vehicles.

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