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European banks drag down regional stock markets

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This is what the Obama administration is probably going to face for the US markets as well as the banks once again reach out for assistance because of poor policy. What infuriates me is that when they consolidated and grew to this "too big to fail" size, everyone made a lot of money. The deal makers pulled in massive amounts as did the executive teams who now had even greater sums to work with for their bonus pools. None of that has been reclaimed and they continue to live well beyond their means yet even now they're handled much too gently by Congress.

The question now is in light of the Wednesday banking woes in Europe and Citi's ongoing problems, who will be next? CNBC has already kicked around UBS rumors but I doubt anyone will be immune to this newest round of misery.

Deutsche Bank tumbled 9 percent after saying it has racked up a loss of about 4.8 billion euros ($6.4 billion) in the final three months of 2008 alone, blaming troubled markets.

HSBC tumbled 8.5 percent after Morgan Stanley analysts said the bank is likely to halve its dividend and may need to raise up to $30 billion in a rights issue.

"Our detailed study of HSBC's capital and asset quality position reinforces our belief that it will have to halve the dividend and raise major capital in 2009," Morgan Stanley analysts Anil Agarwal and Michael Helsby said in a note.

Other leading European banks also took a beating, with Societe Generale down 7.2 percent and Credit Suisse down 6.5 percent.

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