Shares of European banks registered their biggest drop in nine months on Friday morning as investors worried about the US banking sector, Reuters and Agerpres reported.

Europe’s STOXX banking index fell 4.2%, setting the stage for its biggest one-day drop since early June 2022, as Deutsche Bank shares fell 9.85% and Commerzbank shares lost 6.12%.

On the Paris Stock Exchange, Société Générale shares lost 5.14%, BNP Paribas shares fell 4.33% and Crédit Agricole shares lost 3.35%.

Elsewhere in Europe, shares of the British bank fell 5.04%, Italian bank Intesa Sanpaolo fell 3.24% and Swiss bank UBS fell more than 4%.

All of those declines began Thursday night on Wall Street, with Bank of America shares down 6.20%, Wells Fargo down 6.18% and Citigroup down 4.10%.

What caused Friday’s collapse of the stock markets

Most analysts believe that these declines are related to the announcement of SVB Financial Group, an important banking partner for the technology sector, about a large capital increase of 2.25 billion dollars.

With this operation, SVB is trying to consolidate its financial position, which has been hit by customer recalls. SVB also hastily sold a $21 billion bond portfolio to meet the demands of depositors who wanted to withdraw their savings.

Neil Wilson, chief analyst at Markets.com, believes the episode could be the last straw for banks after concerns about rising interest rates and the fragile state of the US economy.

The episode also highlighted how vulnerable the banks are, many of which have been kept afloat by public funds since the global financial crisis a decade ago.

The global financial crisis and the economic fallout of the pandemic forced central banks and governments to print thousands of billions of dollars to support economies, but so far these liquidations have not been taken off the market.