Shares in Deutsche Bank, Germany's largest lender, fell sharply on Friday, dragging down major European banks as fears about weaknesses in the global financial system send fresh shudders through the markets.

Deutsche Bank shares were off 14% in early afternoon trading on the German stock exchange. The drop follows a steep rise in the cost of financial derivatives, known as credit default swaps, that insure bondholders against the bank defaulting on its debts.

Rising costs on insuring debt were also a prelude to a government-backed takeover of Swiss lender Credit Suisse by its rival UBS.

The hastily arranged marriage Sunday aimed to stem the upheaval in the global financial system after the collapse of two U.S. banks and jitters about long-running troubles at Credit Suisse led shares of Switzerland's second-largest bank to tank and customers to pull out their money last week.

Like Credit Suisse, Deutsche Bank is one of 30 banks considered globally significant financial institutions under international rules, so it is required to hold higher levels of capital reserves because its failure could cause widespread losses.

The Deutsche Bank selloff comes despite the German lender having capital reserves well in excess of regulatory requirements and 10 straight quarters of profits. Last year, it made 5.7 billion euros ($6.1 billion) in after-tax profit.

Deutsche Bank and the German Finance Ministry declined to comment.

Other major European banks also fell, with Germany's Commerzbank down 8.4%, France's Societe Generale down 7.2%, Austria's Raiffaisen off 7.5% and the soon-to-merge Credit Suisse and UBS down 8.6% and 8%, respectively.

Rattled by Silicon Valley Bank

Markets have been rattled by fears that other banks may have unexpected troubles like U.S.-based Silicon Valley Bank, which went under after customers pulled their money and it suffered uninsured losses under higher interest rates.

Credit Suisse's troubles predated U.S. collapses of Silicon Valley Bank and Signature Bank, including a $5.5 billion loss on dealings with a private investment fund, but depositors and investors fled after the failures focused less friendly attention on banks and a key Credit Suisse investor refused to put up more money.

European officials say banks in the European Union's regulatory system — unlike Credit Suisse — are resilient and have no direct exposure to Silicon Valley and little to Credit Suisse.

European leaders, who are gathering Friday to gauge any risk of a possible banking crisis, say their banking system is in good shape because they require broad adherence to tougher requirements to keep ready cash on hand to cover deposits.

International negotiators agreed to those rules following the 2008 global financial crisis triggered by the failure of U.S. investment bank Lehman Brothers. U.S. regulators exempted midsize banks, including Silicon Valley Bank, from those safeguards.

The reassurances, however, have not stopped investors from selling the shares amid more general concerns about how global banks will weather the current climate of rising interest rates.

Though higher interest rates should increase bank profits by boosting what they can earn over what they pay on deposits, some long-term investments can sharply lose value and cause losses unless the banks took precautions to hedge those investments.

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