The repercussions of the collapse of "Silicon Valley Bank" caused a widespread sell-off hitting financial sector stocks in North America, where shares of major Canadian banks lost 19.7 billion Canadian dollars (14.2 billion dollars) of their market value during the past four trading sessions.

Shares of major banks in Canada, including "Bank of Nova Scotia," "Bank of Montreal," and "Toronto-Dominion Bank," fell by more than 2% in Friday trading.

The main index, the "Standard & Poor's Composite Index for the Toronto Stock Exchange," dropped more than the decline of the US "Standard & Poor's 500" index, following the largest collapse of American banks in more than a decade which caused market turmoil. The significant decline in the Canadian index is due to the relatively large weight of bank stocks in the index.

The significant impact on Canadian banks from the collapse of "Silicon Valley Bank," which was placed under receivership on Friday, is due to major Canadian banks acquiring regional American banks in recent years.

Defense of Canadian Banks
"Silicon Valley Bank" opened an office in Canada in 2019, and the e-commerce platform "Shopify" became among the bank's clients, whose stock was among the biggest losers in Toronto, and did not respond to a request for comment.

Paul Holden, an analyst at "CIBC Capital Markets," wrote in a research note defending the Canadian financial sector: "Canadian banks have strong liquidity levels," noting that deposits at American banks fell by 2% in the second half of last year, compared to a 4% increase at Canadian banks. He added: "We exclude the banks resorting to liquidating their bond holdings due to deposit withdrawals as Silicon Valley Bank did."

The coming days may witness further repercussions, as "Toronto-Dominion Bank" is the largest shareholder in the financial brokerage company "Charles Schwab," based in Texas, whose stock recorded its worst two-day decline ever, and the bank is negotiating to acquire "First Horizon Bank," whose deposits declined by 10% during the last two quarters. Holden commented that the Canadian financial giant might renegotiate the terms of the deal.

Holden said: "There is a tangible increase in the risk premium for American banks operating in the region."

The share of "First Horizon Bank" fell by 4% in Friday trading.