Lloyds‘ (LSE:LLOY) share price has been falling after it struck multi-year highs last month. At 96.6p per share, the FTSE 100 bank’s a good 14% cheaper than it was when it reached peaks of 112.6p on 3 February.

Of course long-term investors would still be sitting on a big fat profit. The shares are still 34% more expensive than they were a year ago. The question is, could the bank be at the beginning of a prolonged price correction?

Valuation creates risk

Putting my cards straight on the table, I think it’s a strong possibility. For me, the enormous valuations some retail banks command fails to reflect the growing risks they face.

Today Lloyds trades on a price-to-book (P/B)…