European markets expected to open higher after bank lifelines eased crisis fears

Shares of First Republic fell 18% in extended trading, erasing the afternoon rally sparked by a $30 billion deposit plan announced by the country’s biggest banks.

While the move gives First Republic a significant cash pile, the bank did announce after the bell that it had borrowed tens of billions of dollars from the Federal Reserve and the Federal Home Loan Bank over the past week. Outflows of deposits have now “slowed considerably,” the bank said.

First Republic also announced that it was suspending its common stock dividend.

— Jesse Pound

Former Reserve Bank of India Governor Raghuram Rajan thinks it’s still too early to tell whether the U.S. rescue plan to stem bank contagion risks has worked.

“I think what’s happened so far, in terms of the rescues, is sort of done the first aid. The question is — is there a slow bleed that is still going on,” he told CNBC’s “Street Signs Asia.”

“My sense is that we won’t know whether the Fed has been successful on this rescue mission until a few weeks have passed and we see no more problems.”

Rajan, now a professor of finance at The University of Chicago Booth School of Business, noted questions remain around the collapse of Silicon Valley Bank.

“There are lots of questions to be answered here,” he said. “How come a mid-size bank was oblivious of interest rate risk?”

He added regulators need to rebuild confidence in small- and medium-sized banks, and that means “signaling very clearly that the banks with problems have been taken care of and I think we’re not there yet.”

— Sumathi Bala

European equity markets are expected to open higher across the board.

The U.K.’s FTSE index is expected to see a 45 point increase to 7,454.7, according to IG data, while the DAX will jump 32.5 points to 15,030.9. France’s CAC is anticipated to increase 23.5 points to 7,066.1 while Italy’s MIB will gain 150 points to reach 25,621.5.