Five reasons behind US bank stocks sell-off

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Analysts offer a lot of different reasons for the big sell-off, but on this they agree. "Lift-off" in December was supposed to usher in an era of higher interest rates -- which are always good news for the banks. In previous rate-raising cycles, assets have always re-priced faster than liabilities, earning banks a bigger spread between the yields on their loans and the cost of their funds.

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Worsening credit quality: In itself, a lower oil price will not do much direct damage to the big banks' balance sheets, say analysts. Total energy exposures amount to less than 3 per cent of gross loans at the big banks, which have mostly investment-grade assets, and which have already pumped up reserves. Perhaps more worrying are the second-round effects: if weakness in oil-dependent communities begins to spill into commercial real estate loan books, say, or if consumers find they cannot afford repayments on loans for their new gas-guzzling cars.

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Deutsche Bank: Every sell-off needs a point of focus and in recent days it has been Deutsche Bank. The contortions of the Frankfurt-based lender weighed on the entire banking sector on Monday, as it fought to dispel fears that it could not pay a coupon on a bond. "I think maybe counterparty risk is emerging," says Shannon Stemm, an analyst at Edward Jones in St Louis.