Global stocks were gripped by a fresh bout of panic selling on Monday, raising fears over the health of the world’s banking system for the first time since the financial crisis. European markets slumped to their lowest level in more than two years amid an unremittingly bleak outlook for the global economy and concerns over the resilience of the world’s biggest lenders. The Euro Stoxx 600 index of leading bank shares fell as much as 6pc in Monday’s trading, closing down 5.6pc, plumbing depths not seen since August 2012.

The continent’s lenders have now lost 17.3pc of their value of the last 30 days. Volatility forced shares in Barclays to be briefly suspended in late afternoon trading. Barclays, along with BNP Paribas and ING Santander all closed down more than 5pc. Deutsche Bank was world’s biggest bank faller, with its shares down as much as 11.8pc. Germany’s largest lender, which posted a record loss in 2015, closed down 9.5pc on the day, and has seen 40pc of its market capitalisation wiped off since the start of the year. Its shares are now down to their lowest ever level at €13.82 per share. FULL REPORT