Europe's stock markets and the euro slumped on Wednesday on renewed fears of contagion following the collapse of Silicon Valley Bank.
The main US crude oil contract, WTI, slid under $70 per barrel for the first time since December 2021.
Eurozone equities tumbled more than three per cent in value and the euro lost one per cent against the dollar.
In Switzerland, Credit Suisse stock plunged more than 20 per cent to strike record lows.
Shares in Switzerland's second-biggest bank hit 1.73 Swiss francs after the Saudi National Bank chief ruled out upping the key shareholder's stake in the Zurich-based lender, which has been rocked by repeated scandals.
"The financial sector in Europe is under significant turmoil today as a result of SVB's fallout," noted Naeem Aslam, chief investment officer at Zaye Capital Markets.
It follows the demise over the weekend of US lenders SVB and Signature Bank – the biggest casualties since the global financial crisis of 2008.
Having slumped at the start of the week, global equities recovered on Tuesday and in Asia on Wednesday before Europe's latest slump.
Bank shares tumbled across Europe, with Germany's Commerzbank and France's Société Generale and BNP Paribas shedding more than 10 per cent. British lender Barclays gave up about seven per cent.
"What began as a regional banking crisis in the US has suddenly morphed into a European one," said IG analyst Chris Beauchamp. "Surely the ECB are not going to hike yet again just as the crisis intensifies," he told AFP.
What began as a regional banking crisis in the US has suddenly morphed into a European one. Surely the ECB are not going to hike yet again just as the crisis intensifies- IG analyst Chris Beauchamp
The European Central Bank is poised to raise interest rates again on Thursday to tackle high inflation, but the banking crisis has fuelled concern about the health of the sector as borrowing costs increase.
"While the European Central Bank is seen have already pre-committed itself to a 50 basis-point rate hike tomorrow, this won't support the euro if concerns over the health of the financial sector remain dominant," added Rabobank analyst Jane Foley.