GETTY German Chancellor Angela Merkel is facing a fresh financial crisis

FREE now SUBSCRIBE Invalid email Make the most of your money by signing up to our newsletter fornow We will use your email address only for sending you newsletters. Please see our Privacy Notice for details of your data protection rights.

Shares in Germany's two biggest lenders - Deutsche Bank and Commerzbank - fell sharply again as panic gripped global markets. They have now seen their combined market value plummet by more than £14BILLION in the past three months. Deutsche Bank shares fell by nearly four per cent to close at an all-time low amid turmoil not seen since the depths of the financial crisis in 2009. Meanwhile shares in Commerzbank, Germany's second biggest lender, fell even further, by 4.65 per cent, to close at their lowest level in nearly two-and-a-half years.

The short term health of economies including France, Italy and Spain, is dependent on the continued growth of the German economy Andy Baldwin, Global Financial Services Leader, EY

Only last week Deutsche Bank posted record losses of £5.1 billion - higher than expected and enough to spark a fresh wave of desperate selling. It came as shares plunged in another stock market rout on Tuesday which also wiped billions from the value of the UK's biggest banks.



Germany is the world's fourth largest economy and the fate of the eurozone relies almost entirely on its financial security.

GETTY Despair: Deutsche Bank CFO Marcus Schenck announces record losses

GETTY Shares in Germany's two biggest lenders - Deutsche Bank and Commerzbank - fell sharply again

Andy Baldwin, EY’s Global Financial Services Leader, said: “The reliance of the Eurozone on the German economy, bolstered by its strong banking system, is more pronounced than many would expect. "The short term health of economies including France, Italy and Spain, is dependent on the continued growth of the German economy – a major component of which is the further strengthening of its banking sector." Standard Charted closed down nearly six per cent, Barclays five per cent and Lloyds, HSBC and RBS all nearly four per cent. Swiss bank UBS also slumped, falling nearly seven per cent, after reporting a surprise outflow of funds from its flagship wealth management business.

The FTSE 100 saw 138 points - another 2.28% wiped from its value as BP suffered its biggest daily decline since the Gulf of Mexico disaster after reporting its worst annual loss in more than 20 years. It also announced thousands of job cuts. It maintained its precious dividend, but the weak results and outlook are likely to put pressure on the company, which has had to dramatically increase borrowing. "BP's dividend is a mile away from being covered by earnings and the market is saying that this is unsustainable," said Steve Clayton, head of equities research at Hargreaves Lansdown." They are a chasm away from their cash break-even oil price of around $60 dollars per barrel." The pan-European FTSEurofirst index dropped 2 percent, after closing 0.2 percent weaker on Monday. The index is down 8.5 percent so far this year. The STOXX Europe 600 Oil and Gas index dropped 4.8 percent as Brent oil fell more than 5 percent, hit by worries about demand and rising supply. Hopes for a deal between OPEC and Russia to cut output faded.

Shares in Reposol, Royal Dutch Shell, Eni and Total all fell between four and five percent. BHP Billiton fell 6.7 percent after Standard & Poor's cut its credit rating and warned it might be lowered further if measures to shore up cash levels were not taken. BHP is now expected to cut its dividend by half. US stocks were also lower in morning trading, with the Dow Jones Industrial Average down more than 300 points. "We still haven't broken the correlation between oil and equities and we are yet to find a bottom in oil prices," said Jeff Carbone, co-founder of Cornerstone Financial Partners. Carbone said consumer savings from cheap gasoline have failed to translate into higher spending as US consumers opt to pay down debt rather than buy big-ticket items.

GETTY The fate of the eurozone relies almost entirely on Germany

GETTY Chancellor Angela Merkel's economy is set to be plunged into chaos