European, Asian bank shares fall, US banks gain in premarket

SINGAPORE/LONDON, March 13 (Reuters) – Bank shares in Europe and Asia fell on Monday as the collapse of startup-focused Silicon Valley Bank continued to roil markets, although U.S. bank shares rose in premarket trade after authorities moved to contain the contagion . .

The U.S. government stepped in on Sunday with a series of emergency measures to bolster confidence in the banking system following the failure of Silicon Valley Bank ( SVB ) ( SIVB.O ), which marked the biggest U.S. bank failure since the 2008 financial crisis.

That helped U.S. bank stocks gain in premarket trading. Bank of America ( BAC.N ) rose 3% and JPMorgan ( JPM.N ) gained 1.9%, but European and Asian banks were still under pressure.

Europe’s STOXX banking index (.SX7P) fell 2%, after falling 3.78% on Friday. Earlier in the day, Japan’s Topix Bank Index ( .IBNKS.T ) lost 4%, while Singapore’s biggest banks also lost ground, down about 1%. (DBSM.SI), (UOBH.SI), (OCBC.SI)

HSBC’s London-listed shares fell 1.45% after it said it would buy the UK subsidiary of stricken Silicon Valley Bank for 1 pound ($1.21).

After a dramatic weekend, US regulators said the bank’s customers will have access to all their deposits from Monday and set up a new facility to give banks access to emergency funds.

The Federal Reserve also made it easier for banks to borrow from it in emergencies.

U.S. banks lost over $100 billion in stock market value at the end of last week after the collapse, while European banks lost about another $50 billion in value, according to a Reuters calculation.

“The Fed is not only addressing concerns over the bank’s asset side of the balance sheet, but on the liability side, where they are essentially stepping in front of a major bank run that…could be devastatingly fast to topple any institution,” said Chris Weston, head of research at Pepperstone.

“There will likely be further migrations to the stronger banks and those with a large asset base and low equity will continue to see depositors divest capital.”

SVB’s collapse comes alongside the closure of crypto-focused bank Silvergate ( SI.N ), which last week revealed plans to wind down operations and voluntarily liquidate in the wake of FTX’s implosion last year.

U.S. regulators also closed New York-based Signature Bank ( SBNY.O ) on Sunday, which became the next victim of the banking turmoil after SVB.

Reporting by Rae Wee in Singapore and Alun John and Amanda Cooper in London, Editing by Sam Holmes and Ed Osmond

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