Bank shares around the world collapsed despite assurances from US President Joe Biden that the US financial system is safe, the BBC reported.

The decline in the stock's value comes after Biden vowed to do whatever it takes to protect the banking sector following the collapse of Silicon Valley Bank and Signature Bank.

However, investors fear that other financial institutions may also suffer and this has led to a sharp fall in stock prices globally.

On Monday, Spain's Santander and Germany's Commerzbank saw their shares drop at one point by more than 10 percent.

A number of smaller US banks suffered even heavier losses, despite assuring customers that they had sufficient liquidity. The volatility has also led to speculation that the US Federal Reserve will halt plans to continue raising interest rates to curb inflation.

Although Wall Street's major stock indexes steadied in late trading Monday, bank stocks remained under heavy selling pressure. Shares of relatively small credit institutions saw major falls, with First Republic Bank down 61.8%, Western Alliance Bancorp down 47%, PacWest Bancorp down 21% and Zions Bancorp down 25.7%. There was a more moderate decline in the shares of the leading American banks, with Bank of America Corp falling 5.8%, Wells Fargo & Co. - by more than 7%, and JPMorgan Chase & Co. - by 1.8%.

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