Rate-sensitive property stocks continued to support the wider European benchmark this afternoon after a three-day sell-off in the wake of Silicon Valley Bank’s collapse that sent chills through the banking sector globally.

London’s FTSE index had rallied 0.8% this afternoon, while the Paris CAC and Frankfurt DAX were both 1.7% higher.

Dublin’s ISEQ index also reversed its steep losses yesterday to stand 1.8% higher. The banking shares all rallied with AIB up 3.9%, while Bank of Ireland gained 3.2% and Permanent TSB rose 1.6%.

But shockwaves from the collapse of Silicon Valley Bank further pounded Asian bank stocks earlier today despite assurances from President Joe Biden and others.

Biden’s efforts to reassure markets and depositors came after emergency US measures to shore up banks by giving them access to additional funding failed to dispel investor worries about potential contagion to other lenders worldwide.

Banking stocks in Asia extended declines today, with Japanese firms hit particularly hard and anxiety about systemic risk leading the wider market lower.

“Bank runs have started and interbank markets have become stressed,” said Damien Boey, chief equity strategist at Sydney-based investment bank Barrenjoey.

“Arguably, liquidity measures should have stopped these dynamics but Main Street has been watching news and queues – not financial plumbing.”

A furious race to reprice interest rate expectations also sent waves through markets as investors bet the Federal Reserve will be reluctant to hike next week.

Traders currently see a 50% chance of no rate hike at that meeting, with rate cuts priced in for the second half of the year. Early last week, a 25 basis-point hike was fully priced in, with a 70% chance seen of 50 basis points.

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What does the collapse of SVB mean for Ireland?
SVB’s demise: Why didn’t US bank regulators see it coming

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Analysts say uncertainty continues to dog the sector with investors still extremely worried about the health of smaller global banks, the prospect of tighter regulation and a preference to protect depositors at the expense of shareholders should other banks fail.

“There are big questions about exactly how this big jump in interest rates, which has been taking place over the last year, has impacted some businesses,” said Danni Hewson, financial analyst with AJ Bell, who was speaking on RTÉ’s Morning Ireland. “I think a lot of investors are looking around at the banking sector as a whole and asking exactly how robust it is.”

Some of that is based on sheer panic, she said, while some of it is driven by online chatter.

“We’ve seen a lot of business leaders who were tweeting about the the potential collapse of SVB deleting some of their tweets,” said Ms Hewson.

She said the fallout from the collapse may well have an impact on the trajectory of interest rate rises, too, particularly in the US but also in Europe.

“I think that all of these central banks are now going to take a long look, maybe press pause for at least one cycle, just to see how all the different sectors are coping with what’s been going on,” Ms Hewson said.

Major US banks lost around $90 billion in stock market value yesterday, bringing their loss over the past three trading sessions to nearly $190 billion.

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Regional US banks were hit the hardest. Shares of First Republic Bank tumbled more than 60% as news of fresh financing failed to reassure investors and rating’s agency Moody’s reviewed it for a downgrade.

Europe’s STOXX banking index closed 5.7% lower yesterday. Germany’s Commerzbank fell 12.7% and Credit Suisse slid 9.6% to a record low.

Biden said his administration’s actions meant “Americans can have confidence that the banking system is safe,” while also promising stiffer regulation after the biggest US bank failure since the 2008 financial crisis.

“Your deposits will be there when you need them,” he said.

SVB’s customers were given access to all their deposits yesterday and regulators set up a new facility to give banks access to emergency funds. The Fed made it easier for banks to borrow from it in emergencies.

In a letter to clients, SVB’s new CEO Tim Mayopoulos said the bank was open and conducting business as usual within the US and expected to resume cross-border transactions in coming days.

“I recognise the past few days have been an extremely challenging time for our clients and our employees, and we are grateful for the support of the amazing community we serve,” said Mayopoulos, a former CEO of federal mortgage finance firm Fannie Mae who was appointed by the FDIC to run SVB.

US bank regulators sought to reassure nervous customers yesterday who lined up outside SVB’s Santa Clara headquarters, offering coffee and donuts.

“Feel free to transact business as usual. We just ask for a little bit of time because of the volume,” FDIC employee Luis Mayorga told waiting customers.

Regulators also moved swiftly to close New York’s Signature Bank, which had come under pressure in recent days.

“A serious investigation needs to be undertaken on why the regulators missed red flags and what needs to be overhauled,” said Mark Sobel, a former senior Treasury official and US chair of Official Monetary and Financial Institutions Forum, a think tank.

In the money markets, indicators of credit risk in the US and euro zone banking systems edged up.

Emboldened by bets the Fed may have to slow its rate hikes, the price of gold, a popular safe-haven raced above the key $1,900 level.

Companies around the globe with SVB accounts rushed to assess the impact on their finances. In Germany, the central bank convened its crisis team to assess any fallout.