Global financial stocks have lost $465 billion in market value in two days as investors cut exposure to lenders from New York to Japan in the wake of Silicon Valley Bank’s collapse.

Losses widened Tuesday, with the MSCI Asia Pacific Financials Index dropping as much as 3.1% to the lowest since Nov. 29. Mitsubishi UFJ Financial Group Inc. slid 8.6% in Japan, while South Korea’s Hana Financial Group Inc. fell 3.9% and Australia’s ANZ Group Holdings Ltd. lost 1.5%.

There are concerns that financial firms could see an impact from their investments in bonds and other instruments on the SVB-induced worry. Treasury yields fluctuated after plunging Monday amid expectations the Federal Reserve will hold off raising rates due to turmoil in the banking system.

“The financial markets are walking on eggshells,” John Woods, Credit Suisse Group AG’s chief investment officer for Asia-Pacific, said in an interview with Bloomberg Television. “We really need to know precisely what impact this is likely to have around the broader market. My sense is that the Fed will probably pause because I think this is largely to do with liquidity risk.”

The aggregate market value of companies included in the MSCI World Financials Index and the MSCI EM Financials Index has dropped about $465 billion since Friday. US regional banks were among the hardest hit Monday as the KBW Regional Banking Index sank 7.7%, its sharpest plunge since June 2020.

First Republic Bank’s shares have plunged almost 73% in three sessions, making it the the top loser on the MSCI World Financials gauge in the period. Moody’s put all long-term ratings of the lender on review for downgrade.

Shares of European banks and insurers also slumped on Monday, with Credit Suisse Group AG’s stock tumbling 9.6% to a fresh record low amid SVB contagion fears. Meanwhile, the company reported early Tuesday that it has identified “material weaknesses” in previous reporting and is adopting a remediation plan.

Japan Banks

Major northern Asia banks mostly have “minimal risk of the sudden run on deposits that crumpled Silicon Valley Bank” given their solid deposits, asset mixes and liquidity, Bloomberg Intelligence analyst Francis Chan wrote in a note. “Smaller lenders may harbor liquidity and credit risks that could easily be overlooked.”

Japanese financial stocks have been among the hardest hit in the region. That follows a strong run-up since December amid signs the Bank of Japan was pivoting toward tightening after years of ultra-loose monetary policy.

Japanese banks feature prominently among the highest unrealized loss-to-equity ratios in the region, according to data on about 130 Asia Pacific lenders with more than $5 billion in assets compiled by Bloomberg. Jimoto Holdings Inc., Tsukuba Bank Ltd. and Fukushima Bank Ltd. are among those with unrealized loss-to-equity ratios of at least 9%. All three, which have market caps below $150 million each, have fallen more than 10% in three days.

“I’m selling banks and insurers today,” said Taku Ito, chief fund manager at Nissay Asset Management Corp. “No doubt it’s a defeat but I think a lot of fund managers are also doing the same because bank shares had been rising and a lot of growth managers have been increasing bank shares.”