Banks and financial services companies wore the brunt of the equities sell-off on the ASX yesterday, as local investors reacted to renewed global fears about the stability of Europe's banking system.Macquarie Group, which has exposure to European markets through its asset management division, was the hardest hit of the locally listed banks after it lost A$2.85 or 2.5 per cent to close at $113.25 on Wednesday.Major banks also came under selling pressure, with NAB and ANZ each shedding almost two per cent on average turnover.However, the negative sentiment was contained to financial stocks, with the infrastructure, retail, energy and healthcare sectors ending a volatile trading session in positive territory. CLSA banking analyst Brian Johnson said he was not convinced that selling pressure on major Australian banks would persist."I get the fact that the market is spooked," he said."But at the end of the day I think it is highly unlikely that Australian banks will need to cut dividend yields."Even though the negative news continues to flow from the royal commission, I tend to the view that negative trading days are an opportunity to add to holdings of Aussie banks because I don't believe they are expensive anymore." US and European bourses were hammered on Tuesday after billionaire investor George Soros warned that another global financial crisis might be in the offing because of the rise of ultra-nationalist political parties in Southern Europe.Soros highlighted Italy's political instability as a potential source of contagion in financial markets, arguing that the prospect of ultra-nationalist parties forming the next government could derail efforts to place the country's ailing commercial banks on a secure footing."The strength of the dollar is already precipitating a flight from emerging market currencies," he told a gathering of the European Council on Foreign Relations."We may be heading for another major financial crisis."Europe needs to do something drastic to escape it."It needs to reinvent itself."Italy's sovereign debt ballooned in the last decade after the former government of Matteo Renzi boosted spending on pensions and social transfers.National elections on 4 March failed to elect a workable coalition and a new poll is now likely to be held in August or September.The share prices of Italian banks such as Unicredit and Banca Monte dei Paschi di Siena have plummeted by more than 20 per cent in the last three weeks.The chaos in Rome and Milan triggered a sell-off on European bond markets last week, which steepened the risk profile of listed banks in Greece, Portugal and Spain.The Italian economy's biggest structural problem is the high level of government debt, which currently equates to 133 per cent of GDP.This is a big headache for all Italian banks because they collectively own most of the long term bonds issued by the Italian Government.The slide in bond prices is undermining the risk profile of the banks even though government debt attracts a zero risk weighting under European banking regulations.In order to protect the value of their holdings of sovereign debt, the Italian banks might soon have