European markets were trading 2.5% lower Monday morning as global investors focused on the fallout from the Silicon Valley Bank collapse.

The pan-European Stoxx 600 index was down 2.35% at 9:56 a.m. London time, with all sectors and major bourses in negative territory. Bank stocks led losses with a 5.7% drop, followed by insurance and financial services.

The slide in stocks comes despite news that HSBC had agreed to buy the British arm of the troubled U.S. tech startup-focused lender for £1. Customer deposits will be protected as part of the deal.

Shares in HSBC fell 3.5%, while Commerzbank slid around 12% and Credit Suisse was down 9.4%.

Across the Atlantic, U.S. stock futures also turned negative after regulators announced a plan to backstop all the depositors in SVB and make additional funding available for other banks.

On Friday, Silicon Valley Bank was taken over by regulators after massive withdrawals a day earlier created a bank run. All SVB depositors will have access to their money starting Monday, according to a joint statement from the Treasury Department, Federal Reserve and the FDIC.

Elsewhere Sunday, U.S. regulators shut down New York-based Signature Bank, a big lender in the crypto industry, in a bid to prevent the spreading banking crisis.

Asia-Pacific markets traded mixed on Monday as investors reacted to the latest move by U.S. regulators to stem further systemic risk.