While the U.S. banking sector is getting slammed on Monday, it is not quite as bad as what is happening over in Europe. Global financial markets are freaking out after bond spreads in Italy and other European countries blew out to start the week as the region's debt crisis, which started in Greece, appears to be spreading. Italy, in particular, is a major concern due to its size. As panicked bond investors dump sovereign paper in Europe, yields rise making it harder for governments to fund themselves. It is believed that private banks have considerable exposure to these bonds, and as such, investors are punishing their shares. Leading the way down is Deutsche Bank (NYSE:

), which is having a truly bad day. The stock has plunged 5.57% and is now sitting at multi-month lows. The German bank's share price has fallen 14% over the last 52-weeks. Swiss bank UBS AG (NYSE:

) has seen its share price tumble nearly 4% on the session and has broken through some significant support levels. The stock is still up around 3% in 2011. British based Barclays (NYSE:

) is getting thumped to the tune of 5.38% and has lost 19% over the last 52-weeks and more than 9% year-to-date. Royal Bank of Scotland (NYSE:

) is trading down 5% to $11.38 and is also hitting multi-month lows. Shares of Spanish bank Banco Santander (NYSE:

) are down 5.38% to $10.20 on very heavy volume on Monday. That stock has shed around 20% in the last month and more than 4% year-to-date.

Traders who believe that today's reaction to the news out of Italy is an overreaction might want to consider the following trades:

Traders who believe that this is just the start of a full blown panic in Europe may consider alternate positions, such as: