A buyer for Silicon Valley Bank's deposits and loans helped cast an uneasy calm over fragile markets on Monday, which have been roiled by worries of a credit crunch and systemic bank stress.
There are also hopes for extra support for bank funding, after Bloomberg News reported US authorities were in early stage deliberation about expanding emergency lending facilities.
Over the weekend, First Citizens BancShares Inc bought all the loans and deposits of SVB and gave the Federal Deposit Insurance Corp equity rights in its stock worth as much as $500 million in return, the FDIC said in statement.
Customers retain access to their accounts, North Carolina-based First Citizens said, and branches open on Monday. SVB's failure will cost its deposit insurance fund about $20 billion, the FDIC estimates.
The deal has given markets some respite as it sealed the first weekend in several weeks that did not bring news of fresh banking collapses, rescues or emergency help from authorities.
"You sweep Silicon Valley off to another buyer, which is good," said IG Markets analyst Tony Sycamore in Sydney.
"But the bigger issue is guaranteeing deposits at all those other (regional) banks...it's a little bit of calm before the next storm."
Last week ended with indicators of financial market stress flashing and Germany's biggest lender Deutsche Bank in the crosshairs, with its shares down 8.5 per cent on Friday and the cost of insuring its bonds against default up sharply.
On Monday, bank shares in Asia were mixed - mostly steady in Australia Tokyo but slipping in Hong Kong , where Standard Chartered shares fell nearly 4 per cent as prices caught up with a wild Friday in Europe.
S&P 500 futures rose 0.5 per cent and British and European futures each rose 1 per cent.
The collapse of SVB little more than two weeks ago has reverberated around the world, sending US depositors fleeing smaller banks for larger cousins while the hit to confidence forced Credit Suisse into the arms of rival UBS last week.
In March, the Stoxx index of European bank shares is down more than 18 per cent and the US KBW regional bank index has lost 21 per cent, with investors on edge about what's next.
"It's clearly not over," Australia and New Zealand Banking Group Chief Executive Shayne Elliott said in an interview posted to the bank's website, where he said the turmoil has the potential to escalate into a bigger financial crisis.
"I don't think you can sit here and say, 'Well, that's all done, Silicon Valley Bank and Credit Suisse and, you know, life will go back to normal,'" Elliott said. "These things tend to roll through over a long period of time."
Carrots, sticks and acronyms
The sudden spike in tensions for banks has raised questions about whether major central banks will continue to pursue aggressive interest rate hikes to tamp down inflation, and whether tightened lending will hurt the global economy.
In Europe, bank bonds are under pressure and credit default swaps, or the cost of insurance against defaults, uneasily high.
In the US, where flows into money market funds have risen by more than $300 billion in the past month to a record atop $5.1 trillion, focus is on depositors' confidence.
The SBV deal may shore some of that up. First Citizens said it would take on assets of $110 billion, deposits of $56 billion and loans of $72 billion, and expand in California. It will share further potential losses with the FDIC and the FDIC retains some $90 billion in securities held for disposal.
"Effectively you're going to get a combination of carrots, sticks, and acronyms in order to ensure you get the outcome you want and that allows (authorities) to still use interest rates to combat inflation," Rabobank strategist Michael Every said.
"This seems to be part and parcel of that."