Two of Europe's biggest investment banks, Switzerland's UBS and Deutsche Bank, moved to calm investors, telling them that they did not need extra cash to cope with the global markets crisis.
Deutsche Bank's shares jumped by more than 4 per cent while UBS stock rose more than 3 per cent today.
Shareholders had been worried that more trouble lay ahead for UBS, which has already burned through $37 billion in writedowns 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 $15 billion rights issue drew a line under capital raising. Asked about further capital hikes, Mr Kurer told a Swiss television channel: "I am quite clearly of the opinion that this won't be the case."
His comments were echoed in Frankfurt where Deutsche Bank said today 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 sign of relief, helping both banks recover some of the ground lost as shareholders fretted. UBS stock was trading up 3.4 per cent at 20.98 Swiss francs while Deutsche stormed ahead by 4.5 per cent to €54.80 at 9.42am.
UBS, Europe's biggest casualty of the subprime 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 told Reuters 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 writedowns of $8 billion, roughly the same as Credit Suisse. But as conditions in global markets worsen, the bank led by Josef Ackermann is looking increasingly vulnerable.