European stocks fell on Monday and Credit Suisse fell more than 60% after UBS agreed to buy the troubled bank in a $3 billion deal, valuing the Swiss bank at a fraction of its market value and raising fears of a wider banking crisis.

The pan-European STOXX 600 index was down 0.8 percent by 08:07 GMT, after posting its biggest weekly loss of the year on Friday.

Credit Suisse plunged 62.3 percent after rival UBS said on Sunday it would pay 3 billion Swiss francs ($3.23 billion) to buy the 167-year-old bank that suffered a loss of up to $5.4 billion in a bailout overseen by Swiss regulators, UBS shares fell 8.8 percent and the banking sector index fell 5.8 percent in early trade.

Deutsche Bank lost 10% and Commerzbank lost 8.5%, while BNP Paribas and Société Générale lost 8.2% and 7.5%, respectively.

Standard Chartered plunged to the bottom of the FTSE 350, recording a loss of 7.7%, while Natost and Barclays tumbled 7.8% and 7.4%, respectively.

Switzerland's largest bank UBS on Sunday took over crisis-facing rival Credit Suisse after arduous negotiations, while the government announced major guarantees in the hope of averting a severe crisis and restoring investor confidence worldwide.

Parts from the U.S. Treasury to the European Central Bank were quick to welcome the move, fearing fresh turmoil in markets weakened by the bankruptcy of Silicon Valley Bank in the United States.