European banks struggling with falling stock prices are also being buffeted by concerns that bond buyers could take greater-than-anticipated losses if a lender hits financial straits.

Investors say the recent rescue of four relatively small banks in Italy and one in Portugal taught them a lesson with wider implications: Central banks are wary of suffering a political and financial backlash if they force losses on a bank's individual investors, who are often also depositors. And that means larger institutional investors across the Continent, especially in southern Europe, are more vulnerable.