Two of Europe's biggest investment banks, Switzerland's UBS and Deutsche Bank, moved to calm investors, telling them they did not need extra cash to cope with the global markets crisis.
Shareholders had been worried that more troubles lay ahead for UBS, which has already burned through $37 billion (Dh137bn) in write-downs during the market turmoil. Many had also feared that Deutsche, originally seen as one of the victors in the credit crash, could suffer as it drags on.
Late on Tuesday, UBS Chairman Peter Kurer signalled that the bank's recent $15bn rights issue drew a line under capital raising. On further capital hikes, Kurer told a Swiss television channel: "I am quite clearly of the opinion this won't be the case".
His comments were echoed in Frankfurt where Deutsche Bank said yesterday it expected to make a profit in the second quarter of the year and did not need to turn to shareholders for extra money.
Investors breathed a sigh of relief, helping both banks recover some of the ground lost as shareholders fretted.
UBS, Europe's biggest casualty of the sub-prime crisis, has seen its stock price slump to a 10-year low as it showered investors with bad news. Late last week, sources with direct knowledge of the matter said it is examining a sale of the US broker formerly known as Paine Webber – the heart of its US wealth management business.
Many saw this as an indication that UBS was looking for ways of beefing up its finances and the shares crashed by about 10 per cent.
Deutsche, meanwhile, has come away relatively unscathed from the crisis, which started with a collapse in risky US home loans last year. It has made write-downs of $8bn, roughly the same as Credit Suisse. But as conditions in global markets worsen, the bank, led by Josef Ackermann, is looking increasingly vulnerable.
It has warned that profits will suffer this year. Deutsche is facing hurdles in, for example, leveraged finance and structured credit. Formerly a big money spinner, this market has ground to a halt as credit market turmoil spread.