PARIS: European markets extended losses at the open on Monday after US regulators rushed to contain the fallout from the collapse of Silicon Valley Bank and HSBC acquired its UK division.
London’s benchmark FTSE 100 index dropped 0.3 percent to 7,724.32 points.
In the eurozone, Frankfurt’s DAX index shed 0.1 percent to 15,411.42 while the Paric CAC 40 fell 0.5 percent to 7,186,35.
US authorities unveiled sweeping measures on Sunday to rescue depositors’ money in full from failed Silicon Valley Bank and to promise other institutions help in meeting customers’ needs.
A second tech-friendly lender, Signature Bank, was also closed by regulators.
Regulators on Friday took control of SVB – a key lender to startups across the United States since the 1980s – after a huge run on deposits left the medium-sized bank unable to stay afloat on its own.
SVB’s UK arm was sold to HSBC for a nominal £1 ($1.2), the government and HSBC announced on Monday.
SVB’s collapse has rocked the markets, raising concerns that other banks could be facing similar problems.
“The contagion risk remains for small banks with highly rate-sensitive clients but the US authorities now step in to avoid contagion,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
Europe stocks dive on global banking selloff
“The bank crisis will be sitting in the headlines, as solutions and possible contagion beyond the banking sector and beyond the US borders will be on the menu of the week,” she said.
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