What happened

The financial sector has been under pressure lately, fueled by the collapse of SVB Financial's Silicon Valley Bank and concerns about overall confidence in the U.S. banking system. While the sector largely rebounded on Tuesday, it is in the red again once again on Wednesday.

Even the big banks are getting hit hard, with Wells Fargo (WFC 0.89%) and Citigroup (C -1.88%) down by more than 4% and 5%, respectively, as of 9:50 a.m. ET.

So what

The biggest reason for today's turbulence in the financial sector is news related to international megabank Credit Suisse, whose largest investor announced it wouldn't be able to provide any further financial assistance after investing billions in the bank's turnaround efforts last year. And this is on the heels of Credit Suisse's Tuesday announcement of accounting weaknesses, the general fears of a surge of withdrawals in the banking sector, and Credit Suisse's already elevated rate of customer withdrawals.

Having said that, there are some company-specific things to take note of. Wells Fargo filed on Tuesday to raise $9.5 billion in new capital through the sale of debt, warrants, purchase contracts, and more. To be clear, the company is filing a shelf registration, which gives it the ability to sell $9.5 billion in securities from time to time, but it doesn't necessarily have to raise any set amount.

In Citigroup's case, it has much more international exposure than any of the other "big four" U.S. banks, which could certainly explain why it is getting hit hardest on the Credit Suisse news.

Now what

It's important to keep in mind that the big banks -- including Wells Fargo and Citigroup -- are well capitalized. Plus, these banks both fall into the category of systemically important financial institutions, or SIFIs, which are commonly referred to as the "too big to fail" banks. These are institutions that are subjected to much higher regulatory scrutiny than smaller banks (there are some critics that say Silicon Valley Bank would not be same predicament if it was still a SIFI), and that carry an implicit government backstop if things go wrong.

If anything, they could see elevated deposits as a result of the concern surrounding regional banks, and in fact, Bloomberg recently reported that both institutions are seeing higher-than-average deposit volume.

Having said that, it's important for investors to realize that the fear in the financial sector could persist for some time, and the big banks could remain quite volatile. While these are solid institutions that will likely emerge relatively unscathed by the current headwinds, the direction of their stock prices over the coming days, weeks, or months is impossible to predict.