Many equity managers were selling out of financials even before this week's collapse and cut-price acquisition of US bank Bear Stearns. The sector's slide has prompted one investment chief to raise the prospect of a return to the Glass-Steagall separation of retail lending and investment banking.

Jupiter Asset Management's Philip Gibbs, who runs Jupiter's £790m (€1bn) Financial Opportunities fund and is considered a star of the sector, said: "Overall the portfolio remains cautiously positioned, although I am taking advantage of setbacks to add to favoured companies with low exposure to the consumer in the US and Western Europe. Emerging markets growth also continues to be a strong feature of the fund.”