Banking stocks in Australia and Japan fell, following a tumble by their counterparts in Europe and the U.S.
Weston said in a separate note that the long-felt pain in the energy sector had morphed into a banking crisis.
"Much has been made of the demand for credit default swaps (CDS) protecting against future default in the European banking space," he wrote. "Rightly so, when Deutsche Bank has been sold off 58 [percent] from its 2015 high and left with a market capitalization of 21 billion euros. Given they have 54 billion euros in bonds maturing over the next two years (much of this in the next two months) and much of their existing funds tied up as regularity capital, things don't look hugely sustainable."
He added that price action in Asia had reflected these concerns, with "Aussie banks getting smashed, despite not having anywhere near the same balance sheet duress as European banks."
Australia's so-called Big Four banks, ANZ, Commonwealth Bank of Australia, Westpac and NAB, closed down between 3.96 and 4.78 percent.
Japanese banking stocks were also down as concerns persisted over their profitability after the central bank introduced a negative interest rate policy on January 29. Shares of Mitsubishi UFJ were down 8.73 percent, SMFG fell 8.97 percent and Mizuho Financial slipped 6.22 percent.
The official summary of the central bank's meeting, released Monday, showed the Bank of Japan's members tussled over the decision to adopt negative interest rates, raising concerns about banks' profitability and that other countries' policymakers would also cut rates.
"I am concerned that the Bank's introduction of a negative interest rate could lead to a competition with central banks in other countries, which already have adopted negative interest rates, to lower interest rates deeper into negative territory," one member said, according to the summary of opinions at the monetary policy meeting.
Takuji Okubo, managing director and chief economist at Japan Macro Advisors reckoned the Bank of Japan's negative interest rate move was an attempt to anticipate and preempt a change in market sentiment.
"There are people who say the BOJ created too much uncertainty. I don't think that's it," he said, attributing the current market volatility to negative news on China and emerging markets as well as market expectations that the U.S. Federal Reserve may give up on hiking rates.
"They think that once they do that, the yen will appreciate and the BOJ has to do something, (such as) to cut the policy rate further," Okubo added.
Overnight, Goldman Sachs was one of the top losers on the Dow Jones industrial average, falling 4.61 percent.
In Europe, banking stocks also declined, with Italy's UniCredit down 6 percent and Banca Monte dei Paschi di Siena slumping some 12 percent after receiving a cut to its stock price target from J.P. Morgan. In the U.K., shares of HSBC were down 4 percent and Barclays temporarily suspended trading Monday due to outsize moves before eventually closing 5.3 percent lower.
Elsewhere, analysts are also concerned that banks will face a tough earnings environment.
In the U.S., Citigroup lowered its earnings forecasts for U.S. banks, citing in part its expectations the Federal Reserve was unlikely to raise rates this year because financial conditions were already tightening. Citi said it now assumed the Fed funds rate would normalize at around only 1.5 percent, a level that would weigh on net interest margins for U.S. banks.
"If this view of flat rates materializes, it will be a very tough environment for spread lenders," Citi said in a note on Monday. "We see low single digit net interest revenue growth over the next couple years as the net interest margin will likely step down as longer duration books reprice."