Let's begin with the extreme market pressure on the global banking sector that now dominates investors' concerns (even more so than crude oil). At the center of this turbulence of course is Deutsche Bank. Here is the firm's senior debt CDS spread which continues to rise.

Source: @AlasdairPal

News headlines such as the one below aren't helping.

Source: Reuters

Even the 1-year DB CDS spread has climbed sharply.

Source: @Schuldensuehner

Moreover, Deutsche's subordinated debt CDS spread widened to record levels.

Source:  ‏@Sunchartist 

As a result of the above, the German sovereign CDS also rose on Thursday, indicating that the market is pricing in some probability that Germany will be bailing out Deutsche Bank.

Source:  ‏@BTabrum

Other banks have been under pressure as well. Here are the shares of credit Suisse (US-listed ADR) – the lowest in almost 30 years. That's quite alarming.

Source: Google

At this point, shares of European financials are down over 30% in the past 6 months.

Source:  Ycharts.com

Below is the S&P Bank Index vs. the S&P500 – relative performance. Given that US banks are generally quite healthy, is the selloff overdone.

Source: ‏stockcharts.com

One of the concerns around financials has to do with negative rates. The fear is that central banks across the globe will push rates deeper into negative territory forcing banks to take losses on their reserves.

In fact Sweden's Riksbank just did that.

Source: Investing.com

Source: Bloomberg.com

Part of the goal here was to weaken the krona vs. the euro. However as we've seen in Japan recently, the effectiveness of such actions by central banks is becoming short-lived. The krona fell sharply initially (chart shows the euro rising) but quickly recovered. Central banks are facing what amounts to “law of diminishing returns”.