European Bank stocks fall due to Russian Sanctions

Shares of European banks fell on Monday as the effects of western sanctions on Russia's financial system, including the suspension of certain banks from the SWIFT payment system, spilt over into the global market. The Eurozone Banking Index has fallen by more than 7% to levels not seen since November.

Investors have bet on European bank shares rising as the continent's economy recovers from the pandemic, but Russia's invasion of Ukraine has affected lenders through multiple channels.

Expectations that the European Central Bank will quickly tighten monetary policy to combat rising inflation have dissipated in recent days, with traders believing the ECB may be worried about the economic damage caused by the conflict in Ukraine.

Austria's Raiffeisen bank (RBIV.VI), France's Societe Generale (SOGN.PA) and Dutch banking group ING, which have significant regional influence, fell 14.1%, 10.9% and 9.8% respectively as of 1006 GMT.