Since it invests in all sectors of the economy, banking is a bell-weather of that economy. It is an indicator of the performance of the system as a whole.
Yesterday Credit Suisse shares tumbled to a 24-year low.
Globally, the financial sector is the worst performing in the MSCI World index in 2016.
Bank shares have been hit by worries over exposure to the US energy sector, market turmoil, and mounting expectations that the Federal Reserve will delay rate rises and other central banks will ease monetary policy further.
Chief Executive Tidjane Thiam said: “it is not clear when some of the current negative trends in financial markets and in the world economy may start to abate.”
Head of Goldman Sachs, Lloyd Blankfein, argued on Wednesday that the “general malaise” was overdone, but said that it was “a riskier world with more pessimism now”.
Michael Hartnett, chief investment strategist at Bank of America Merrill Lynch, said negative interest rates in the eurozone and Japan were “crushing” bank stocks. He advised clients to sell riskier assets until there was a “co-ordinated and aggressive global policy response”.