Shares in top European banks have plunged as concerns over weaknesses in the global banking sector intensify, prompting fears of another “2008-style” financial crisis.

The sell-off of banking stocks took a turn for the worse on Wednesday, leading to reports that some major shares had been temporarily suspended.

Swiss bank Credit Suisse was driving the panicked mood after one of its top investors, Saudi National Bank, said it could not increase its stake in the struggling lender.

The Zurich-listed bank saw its share price tank by more than 25% before trading was temporarily halted.

It led to sharp falls in the share price of other big banks, with London-listed Barclays plunging by more than 8%, and European banks like Societe Generale and BNP Paribas showing losses of around 10%.

“This comes fresh off the heels of a broader industry sell-off following the collapse of Silicon Valley Bank,” said Fawad Razaqzada, a market analyst for City Index and Forex.

“Concerns over another 2008-style financial crisis have intensified,” he warned.

The collapse of Silicon Valley Bank (SVB) in the US prompted fears about the health of the banking sector, and the impact of a relentless cycle of interest rate rises.

Despite President Joe Biden seeking to reassure Americans that the US’s financial system is sound, the failure spooked global investors during a time of nervousness around the robustness of smaller, regional banks.

Credit Suisse added fuel to the fire after revealing on Tuesday that it had found “material weaknesses” in its financial reporting, meaning it failed to identify certain risks.

It follows a difficult time for the international bank, which recorded a heavy group net loss of 7.3 billion Swiss francs (£6.5 billion) over last year.

Neil Wilson, chief market analyst at Finalto, warned that Credit Suisse is “too big to fail” and noted concerns from investors that the bank could be “the next shoe to drop” following SVB’s failure.

Andrew Kenningham, an economist at Capital Economics, admitted that “at this stage, a huge amount is unclear” regarding the viability of the lender.

He said: “The problems in Credit Suisse once more raise the question whether this is the beginning of a global crisis or just another ‘idiosyncratic’ case.

“Credit Suisse was widely seen as the weakest link among Europe’s large banks, but it is not the only bank which has struggled with weak profitability in recent years.”

Furthermore, the European Central Bank (ECB) is expected to increase interest rates again on Thursday, adding to nervousness about the banking sector.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “It seems investors have been rattled by worries that the ECB may still opt for a big rate increase, despite the problems hard and fast monetary policy tightening has had on bond prices.

“The worry is that banks sitting on large unrealised losses in their bond portfolios might not have sufficient buffers if there is a fast withdrawal of deposits.

“Although the biggest players are judged not to be at risk, thanks to the chunky layer of capital they are sitting on and the stable nature of their deposits, the nervousness is palpable.”

Nevertheless, Ms Streeter said the issues do not mean there are reasons to be concerned about another financial crisis.

“The banking sector is going through a very rocky patch – it is clear there could still be some volatile times ahead, but it doesn’t herald a systemic risk,” she said.