Shares in US regional banks tumbled on Monday, marking a third day of losses for the sector on concern that lenders may be forced to take further writedowns and dilute shareholders with new capital.

The KBW BKX index for large banks dropped 2.95 per cent to a more than 10-year low, as every stock in the 24-member index fell, led by sharp drops for Huntington Bancshares, Sovereign Bancorp and Comerica.