Market Insider

European banks rocked again as investors digest Brexit vote

Banks in Europe saw their stocks fall sharply for a second straight session on Monday as investors digested the United Kingdom's historic vote last week.

U.S.-listed shares of Barclays plunged nearly 21 percent, while the Royal Bank of Scotland, Deutsche Bank and UBS shares fell 15 percent, 5.7 percent and 8.2 percent, respectively.

The U.K. voted last week to leave the European Union in a referendum that shocked financial markets across the globe.

On Sunday, Goldman Sachs lowered its global growth forecast, adding it now sees the U.K. entering a recession by early 2017.

Traders look at their screens at the stock exchange in Frankfurt, Germany, June 24, 2016, after Britain voted to leave the European Union in the EU BREXIT referendum.
Ralph Orlowski | Reuters

"The upshot is that the assumed hit to the UK and the moves seen in financial markets so far imply only moderate economic spillovers. The GDP effects are consistent with the forecast adjustments in the Euro area and the US already announced, although they suggest that Japan is at risk of even weaker growth than our Japan team's ½-1% forecast for 2016-2017 if Friday's FCI tightening does not reverse," the bank said in a note to clients.

U.S. bank stocks also fell Monday, but not a sharply as their European counterparts.