Strong government intervention on both sides of the Atlantic has failed to calm jittery markets following turmoil in the banking industry, but German Chancellor Olaf Scholz does not believe that Europe is heading toward a crisis.
"I don't see that danger," the chancellor said in a story published by the German business newspaper Handelsblatt on Friday.
Despite multi-billions in support by Swiss regulators, the ailing bank major Credit Suisse came under renewed pressure again on the stock exchange on Friday.
Banking supervisors at the European Central Bank planned to deal with the problems in a second special meeting this week on Friday. The ECB had previously stressed that "the euro area banking sector is resilient: capital and liquidity positions are sound."
Scholz does not expect any consequences for German savers after the collapse of the California-based start-up financier Silicon Valley Bank (SVB), which started the banking quake last week, followed days later by turmoil surrounding Credit Suisse.
Deposits are safe, he told Handelsblatt. "We live in a completely different time," he told the paper, referring to comparisons with the 2008 financial crisis.
The massive Swiss central bank support package for Credit Suisse was followed on Thursday by a coordinated bailout of another stumbling financial institution in the United States - this time another regional bank, First Republic.
Faced with liquidity worries and sharp stock market losses, First Republic is receiving a total $30 billion cash injection from the biggest US money houses, including JPMorgan Chase, Citigroup, Bank of America and Wells Fargo.
The move was "most welcome" and demonstrated the resilience of the banking system, said a joint statement from the US Treasury Department and the Federal Reserve.
Still, renewed heavy losses at the major Swiss bank Credit Suisse and the share price disaster for the US regional bank First Republic pulled prices in the broader sector down again and the German DAX index was not spared.
On Friday the index of Germany's major companies slipped after the big drop on the futures exchanges and was down 1.20% at 14 787.70 points in the afternoon.
The MDax index of medium-sized company stocks had fallen earlier in the day while the leading eurozone index EuroStoxx 50 lost 1.08% to 4072.41 points.
One problem, according to financial expert Gerhard Schick, is that Europe must catch up with the US in terms of bank regulation in order to be prepared for an emergency.
When California-based SVB was in trouble, the US deposit insurance agency (FDIC) was able to intervene directly and create stability very quickly, said the chairman of the citizens' movement Financial Turnaround on public broadcaster ARD's morning show.
"In Europe, we do not yet have such an authority that combines resolution and deposit insurance," he noted, saying this must be remedied now.
