First, there was concern that the Greek bailout could fall apart, if Finland requires additional collateral from Greece.

More importantly, there is a rumor that some bank had to borrow $500 million from the ECB overnight, paying a high 1.1%, compared to the normal cost of 0.7%.  That strongly suggests some bank is in serious trouble, but nobody knows who that bank is.  Therefore, since European bank stocks cannot be shorted, all European bank stocks got sold.