UK and European bank shares rebounded Tuesday as the pound gained ground and markets took a pause after two days of heavy selling.

Barclays and Lloyds Banking Group were both up around 6% despite two credit-rating downgrades Monday night for the UK. The two banks's fortunes are closely tethered to the UK economy and spending and investment. Italian banks also gained after reports Monday the Italian government might inject €40 billion ($44.11 billion) into its banks.