European banking stocks are diving once again

European banking stocks are taking a hammering once again on Tuesday asFriday's stress tests continue toweigh heavily on the minds of investors in Europe's financial sector.Banking stocks plummetted on Monday as investors got their first chance to digest the results of the European Banking Association stress tests released after markets closed on Friday night,and on Tuesday that plunge has continued, with virtually every lender on the continent in negative territory, and the STOXX Banking Index substantially in the red.Around 10:40 a.m. BST (5:40 a.m. ET) the Europe wide bank index is lower by more than 3.6%, and is plumbing a three week low. Here's how that looks:On a bank-by-bank basis, Italian lender Monte dei Paschi di Siena, which sits at the very heart of the country's banking crisis, is lower by more than 7% on the day, having seen its stock price jump on Monday. Monte dei Paschi managed to agree a last minute rescue deal with a consortium of banks on Friday evening to try and address its non-performing loan problems. However, the world's oldest bank also came dead last in the EBA's stress test.Despite assurances from Italian prime minister Matteo Renzi that Monte dei Paschi's NPL problem is now over, investors are starting to doubtjust how viable therescue planwhich will give a 5 billion capital injection to the bank and shift its entire portfolio of NPLs (worth roughly28 billion)into a securitisation vehicleactually is. That has sent shares crashing once more, and erased all of yesterday's gains. Here's the chartElsewhere in the banking sector, things don't look much better on Tuesday. Here's a snapshot of how the continent's banks are performing so far on Tuesday, and it is a sea of red:Shares in British banks are also tumbling on the day, although relatively speaking, they are getting away pretty much unscathed. Here's a look at how the UK's financial institutions are doing on Tuesday:Lloydsdown 2.23%Barclaysdown 2.74%Royal Bank of Scotlanddown 2.93%HSBCdown 0.73%British banking stocks have already taken a pounding in the aftermath of the UK's vote to leave the European Union, with shares in the country's biggest lenders falling as much as 30% on the day after the referendumas fears about the state of the economy hit home.Join the conversation about this storyNOW WATCH: Uber China is merging with an Apple-backed competitor
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