Deutsche Bank, UBS hit as bank fears spark stress signals in markets

European banking stocks fell sharply on Friday, with Deutsche Bank and UBS knocked by worries that actions by regulators and central banks have not yet contained the worst problems to face the sector since the 2008 global financial crisis. Financial market stress indicators were also again flashing warning signs more widely, with the euro falling against the dollar and bond yields sinking.

Deutsche Bank shares fell for a third day, dropping more than 12 per cent after a sharp jump in the cost of insuring its bonds against the risk of default.

Shares in Germany’s largest bank have lost a