European stock markets plunged on Wednesday as concerns about the banking sector resurfaced, with Credit Suisse shares sinking to fresh record lows after its top shareholder ruled out fresh investment.

The main indices in Paris and Milan fell more than three percent, while Frankfurt and London shed around 2.5 percent in late morning trades, with Credit Suisse plunging 20 percent and French bank Societe Generale by 10 percent. 

The falls in Credit Suisse's share price came after Saudi National Bank said it could not go above 10 percent ownership due to a regulatory issue. Many European currencies suffered big drops on Wednesday.

The market turmoil follows a challenging few days for global banking after U.S.-based Silicon Valley Bank - which specialized in lending to technology companies - was shut down by regulators who seized its assets on Friday.

HSBC bought the UK arm of Silicon Valley Bank for a symbolic £1 ($1.21) on Monday, rescuing a key lender for technology start-ups in Britain, as the largest bank collapse since the 2008 financial crash continued to batter markets.

Wednesday's trading in the European shares was halted a number of times by the stock exchange operator as volumes soared and the stock plummeted.

An index of European bank stocks fell in morning trading, hitting its lowest level since January 4. The index has lost 13 percent in value since last Wednesday, marking its biggest week-on-week loss since the start of the Ukraine conflict last February.

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"Markets are wild. We move from the problems of American banks to those of European banks, first of all Credit Suisse," said Carlo Franchini, head of institutional clients at Banca Ifigest in Milan.

"This is dragging lower the whole banking sector in Europe. The shares accelerated losses after the Saudis commented. I believe Credit Suisse's crisis can be solved and the bank will not be let to go belly up."

Credit Suisse on Tuesday published its annual report for 2022 saying the bank had identified "material weaknesses" in controls over financial reporting and not yet stemmed customer outflows.

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