Italy's Banca Monte dei Paschi di Siena and regulators are investigating the trades.

BBC: Banca Monte dei Paschi trades probed in Italy

Italian banks posted losses, with Banco Popolare down 4.7%, Banca Monte dei Paschi di Siena off 3.4%, and UniCredit shedding 2.1%.

WSJ: European Stocks Slide

The recent takeover by Banca Monte dei Paschi di Siena of Banca Agricola Mantovana has created a precedent for change among its fellow co-operatives.

ECONOMIST: Mutually assured destruction?

Banca Monte dei Paschi di Siena's shares tumbled further amid fears that years-old structured-product contracts could leave the bank with larger losses than expected for 2012.

WSJ: What's News

In November, when it asked for more aid, Italy's Banca Monte dei Paschi di Siena reported a loss of 1.7bn euros for the first nine months of the year.

BBC: Banca Monte dei Paschi trades probed in Italy

Italian financial police detained Gianluca Baldassarri, a former executive at Banca Monte dei Paschi di Siena, as part of a probe into the bank, fearing he could leave the country.

WSJ: What's News

This lending constriction worsens a eurozone recession, which in turn exacerbates the weakness of banks: a financing or liquidity crisis morphs into a solvency crisis, as has already happened in Spain and looks set to happen in Italy (yesterday's refinancing of Italy's Banca Monte dei Paschi di Siena augurs ill).

BBC: Business

Unicredit is down 17.01%, Banco Monte Dei Paschi di Siena has lost 20.77%, Banca Popolare di Milano Scarl has dropped 21.39% and Intesa SanPaolo has plummeted 27.70%, according to data provided by Cantor.

FORBES: Greek Contagion Catching Like Wildfire