The scariest thing about the recent stock market selloff has been the way investors are treating the major U.S. banks.

Shares of Bank of America and Citigroup have lost almost a third of their value in the past month, falling twice as much as the broad market averages. Wells Fargo, US Bancorp and PNC Financial Services are all down by roughly 25 percent.

The market’s mood brings back bad memories of 2008, when every week seemed to bring news of a major bank failing or needing bailout. And this new bout of nervousness should remind us that we have many unresolved issues left over from the financial crisis, including the question of how to deal with banks that are too big to fail.

These giants, it must be said, are in much better shape than they were three years ago.

“The big banks are better capitalized, and they have put better quality capital on their balance sheets,” says Tom Lewandowski, a banking analyst at Edward Jones. “I can’t find anything that’s on the balance sheet that I’m worried about like the subprime mortgage bonds in 2008.”

The banks also have boosted their loan-loss reserves, says William Isaac, global head of FTI Consulting’s financial institutions practice. They’re also awash in liquidity, the day-to-day funding that dried up back in 2008.

In other words, there are no signs of a renewed financial crisis. So, why the sagging stock prices?

In a word, Europe. Some European banks face major losses if nations like Greece and Portugal default on their debt. The world of derivatives is still pretty opaque, and the mortgage bubble taught us how widely risk can be spread, so the markets treat a problem for some banks as a potential problem for all banks.

Still, analysts say the U.S. banks hold relatively little European sovereign debt. “The main exposure is if Europe is heading back into recession,” says Isaac, a former chairman of the Federal Deposit Insurance Corp. “Does it drag the U.S. with it, and what kind of problems would it cause the banks to go through another recession?”

The U.S. government’s near-impasse over the debt ceiling also raised fears of a new recession, which would cut into banks’ profits and swell their problem-loan rolls.

Lewandowski believes today’s banking system is strong enough to handle such problems. “I feel confident, given where a lot of these banks are from a capital perspective,” he said. “I don’t think they pose a catastrophic type of risk.”

Still, we need to face facts: Banking crises do happen from time to time, and we still don’t have an adequate regulatory framework to deal with a fallen big bank. Last year’s Dodd-Frank Act requires each too-big-to-fail bank to draw up the equivalent of a living will, detailing how to wind it down if it gets into trouble.

Those living wills aren’t in place yet, however, and some experts doubt that they’ll work. Isaac, for one, considers Dodd-Frank an ineffective law that hurts the banking system by imposing new costs.

“Dodd-Frank was possibly the worst financial legislation I’ve seen in my lifetime,” the longtime bank regulator said. “It would not have prevented the last crisis, and it won’t prevent the next one.”

Banking is ultimately about confidence, and confidence is a fragile thing. If we didn’t learn that in 2008, the stock market’s summer swoon has just sent a reminder.