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ank shares across Europe have fallen sharply as worries over the financial strength of the sector return, media reports said.

Shares in Germany's Deutsche Bank saw the biggest fall, dropping 13 per cent, and there was also a sharp jump in the cost of insuring against losses on its debt, BBC reported.

Investors have already been spooked by the collapse of two US banks and the rushed takeover of Swiss giant Credit Suisse by its rival UBS.

Stock markets in London, Germany and France were all lower, BBC reported.

Other banks to see hefty share falls included Germany's Commerzbank, down 8 per cent, and France's Societe Generale, which fell 7 per cent.

In the UK, Barclays and NatWest were both down by about 6 per cent, BBC reported

Russ Mould, investment director at AJ Bell, said the drop in Deutsche Bank's share price was "indicative of a wider loss of confidence in the banking sector".

"There's a gathering fear that central banks may have overdone it with interest rate increases, having left them too low for too long," he said.

With the possibility of recession, "banks will generally find it pretty hard going".

He added that investors were pulling money from regional banks and banks with big investment arms, and investing in bigger traditional banks, BBC reported.