European bank stocks are now trading like technology stocks did before the bust of the early 2000s, Peter Toogood, Director of Investment Services at Old Broad Street Research, told CNBC Tuesday.
"They are just trading stocks, and at this stage no-one wants to step in, apart from some of the good French, Scandinavian and Swiss banks," he added.
The European Banking Authority (EBA) will publish stress test results for 91 of the region's biggest banks on Friday afternoon. This will provide the market with some more clarity on how troubles in Greece and elsewhere have affected Europe's banks.
Spain and Italy have become the focus of fears of contagion this week, with renewed speculation that their debt burdens could lead to default.
Up to six Spanish banks have failed the European stress tests, Spanish newspaper ABC reported Tuesday.
Spain's Economy Minister Elena Salgado admitted some of Spain's banks had failed the tests on Monday. She said that they had slipped up because generic provisions, or cash put aside by the banks to cover potential losses, were not counted as core capital.
"I don't think anything is going to stress test the idea that major countries could default," Toogood said.
"How do you prepare for that scenario? How do you prepare for the idea that the third and fifth largest economies in Europe could default?"
"You can't manage day-to-day on what's coming out of Brussels," he added.
"At the moment, markets see the short-term noise of political ineptitude as the problem."
On Monday, Italian and Spanish stocks and bonds suffered another big selloff and the euro fell. Tuesday's open is expected to see another fall across the euro zone.