(Bloomberg) -- Authorities allaying concerns of systemic risk allowed risky bank bonds to pare losses from the shock wipeout of some Credit Suisse Group AG debt.   

Additional Tier 1 dollar notes of lenders globally have climbed an average 2.7 cents since Monday, according to data compiled by Bloomberg which excludes Credit Suisse debt. Still, they’re down around 6 cents for all of March after a Swiss regulator’s decision to write down about 16 billion francs ($17.5 billion) of Credit Suisse AT1s rocked the market.

A show of support by policymakers after the troubled bank’s rushed purchase by UBS Group AG, together with elevated capital buffers at most lenders, has helped ease fears of contagion. That means investors are looking for opportunities in bank bonds, including beaten-down AT1s. 

“Quasi-sovereign financials, whose AT1 bonds have taken a hit recently due to the Credit Suisse-UBS merger, represent one area of potential opportunity for those who can do the fundamental analysis and pick the right issuers,” said Wei Zhang, a portfolio manager for Asian debt at Matthews International Capital Management.

Still, the collapse of three banks in the US and the Credit Suisse deal have exposed vulnerabilities in financial markets following aggressive central-rate tightening. 

“While we remain confident that systemic risk is low, we suspect the impact of higher interest rates is not yet fully reflected in the credit spreads of banks or corporates,” said Mark Reade, head of fixed-income desk research at Mizuho Securities Asia. 

Read: US Bank Jitters Cement Citigroup’s Negative View on Risk Assets

Treasury Secretary Janet Yellen told US lawmakers Thursday that regulators would be prepared to take further steps to protect the banking system if warranted. That mirrored remarks by European Central Bank President Christine Lagarde this week that its policy toolkit is fully equipped to provide liquidity support to the euro-area financial system if needed. 

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