Credit Suisse shares surged on Thursday after the Swiss central bank agreed to loan the bank up to £45 billion to bolster confidence in the country’s second-biggest lender and blunt concerns about the international financial system after the collapse of two US banks.

Credit Suisse announced the agreement before the Swiss stock market opened, sending shares up as much as 33% before they settled at a 25% gain in midday trading.

That was a massive turnaround from a day earlier, when news that the bank’s biggest shareholder would not inject more money into Credit Suisse sent its shares tumbling 30%, dragging down other European banks.

European banking stocks also rose modestly on Thursday.

The Swiss National Bank said on Wednesday that it was prepared to back Credit Suisse because it met the higher capital and liquidity requirements imposed on “systemically important banks”, adding that the problems that have hit some US banks do not “pose a direct risk of contagion” to Switzerland.

“You need to restore trust as quickly as possible, and that’s what the Swiss National Bank is trying to do,” said Carlo Lombardini, an international banking expert at the University of Lausanne.

“And we all know that the central bank is a lender of last resort, and it will lend money to a bank which is solvent because central banks do not lend to insolvent banks.”

Credit Suisse, which was beset by problems long before the US bank failures, said on Thursday that the loans from the central bank would give it time to complete a reorganisation designed to create a “simpler and more focused bank”.

“These measures demonstrate decisive action to strengthen Credit Suisse as we continue our strategic transformation to deliver value to our clients and other stakeholders,” chief executive Ulrich Koerner said in a statement.

The European Central Bank carried through with a large interest rate increase later on Thursday, brushing aside predictions it might dial back as the US and Credit Suisse troubles fed fears about the impact of higher rates on the global banking system.

The ECB hiked rates by half a percentage point, underlining its determination to fight high inflation. In a post-meeting statement, the bank called the banking sector in the 20 countries using the euro currency “resilient”, with strong finances.

Central banks in the US and Europe have moved quickly to restore confidence in the banking system after last week’s collapse of Silicon Valley Bank, the second-biggest bank failure in US history.

Credit Suisse shares had dropped to a record low on Wednesday after the Saudi National Bank said it would not put more money into the Swiss lender to avoid regulations that kick in if an investor’s stake rises above 10%.

Credit Suisse also reported on Tuesday that managers had identified “material weaknesses” in its internal controls on financial reporting as of the end of last year. That fanned new doubts about the bank’s ability to weather the storm.