European finance ministers and the EU's economics commissioner played down the contagion risk of the collapse of US Silicon Valley Bank (SVB) while European bank shares saw their biggest rout since the start of Russia's invasion of Ukraine.

Pan-European STOXX banking index was down 5.38% by 1700 CET after being down more than 6%, extending Friday's losses when it shed 3.8%. Over two days, it lost nearly nine percent, after being down as much as 10.4% in afternoon trade and hitting its lowest level since early January.

At the start of a Eurogroup finance ministers meeting in Brussels, French Finance Minister Bruno Le Maire called on markets to "calm down" and European Economic Commissioner Paolo Gentiloni stressed he did not see a risk of contagion for European banks following SVB's collapse SIVB.O.

"There is a possibility of indirect contagion, but at the moment we do not see this as a specific risk," Gentiloni said.

Germany's Commerzbank was the worst-hit bank in the index, down nearly 13% at 1700 CET, but German Finance Minister Christian Lindner said in Brussels that the SVB collapse "changes nothing" for Germany.

"I have faith in the German economy," he said.

France's Le Maire and his Belgian counterpart Vincent Van Peteghem also said they saw no specific concern for their country's banks, as investors were dumping their financial institutions' shares.

Shares of French banks Societe Generale and BNP Paribas were down over six percent, while shares of Belgian KBC were down nearly six percent shortly before market close.

"There is no link between the different situations...when you are looking at the economic model and the financial model of BNP Paribas, Société Générale, and other French banks: it is radically different from the model of the Silicon Valley Bank," Le Maire said.

Belgian finance minister Vincent Van Peteghem also poured oil on the waters.

"We have a very clear European and Belgium regulatory framework which allows us to know what the situation is and that of course helps us to keep to keep trust in the banking system," he said.

In Spain, shares of Sabadell, Santander, BBVA, Caixabank and Unicaja fell between 7% and 11% in afternoon trading.

"Spanish banks have a reinforced supervisory framework and have a healthy balance sheet," Spanish economy minister Nadia Calvino said.

Meanwhile, Irish finance minister Michael McGrath said it was still "early days" with respects to seeing the impact of the collapse, adding Ireland welcomes the acquisition of the British arm of the collapsed Silicon Valley Bank by HSBC.