NEW YORK (

TheStreet

) --

Morgan Stanley

(MS) - Get Morgan Stanley (MS) Report

was the loser among large U.S financials on Friday, with shares of the investment bank dropping 11% to close at $13.50, on

rumors of outsized exposure to crumbling European banks

.

Morgan Stanley's shares were trading for just above half their June 30 tangible book value of $24.35, according to SNL Financial. Atlantic Equities analyst Richard Staite lowered his thir-quarter EPS estimate for the investment bank to 24 cents from 52 cents, citing an expected 37% decline in institutional securities revenue, but even with a neutral rating, the analyst's $18 price target implies 33% upside for the shares

Shares of rival investment bank

Goldman Sachs

(GS) - Get Goldman Sachs Group, Inc. (GS) Report

were down over 5% to close at $94.55.

The broad indexes saw declines of over 2% as investors worried about a slowing global economy, with a report of a third-straight monthly decline in Chinese manufacturing, according to a report from HSBC Holdings and Markit Economics, as well as reports of slowing retail sales in Germany.

The European Central Bank reported that inflation in the Eurozone was above 3% in September, exceeding the central bank's target of below 2%, as well as economists' expectations of 2.5%.

The

KBW Bank Index

(I:BKX)

declined 4% to close at $35.34, with all 24 index components seeing big decines.

Large U.S. banks seeing shares plunge over 6% Friday included

Zions Bancorporation

(ZION) - Get Zions Bancorporation (ZION) Report

, which closed at $14.07, and

Regions Financial

(RF) - Get Regions Financial Corporation Report

, closing at $3.33.

Regions has been one of the more volatile stocks among the nation's largest banks, and bears the distinction of being the largest publicly traded bank holding company still owing government bailout funds received through the Troubled Assets Relief Program, or TARP. The company owes $3.5 billion in TARP money.

Big banks seeing 5% declines to end the week included

Citigroup

(C) - Get Citigroup Inc. Report

, closing at $25.62, and

KeyCorp

(KEY) - Get KeyCorp (KEY) Report

, which closed at $5.93.

Bank of America

(BAC) - Get Bank of America Corp Report

was down 4% to close at $6.12, as the

major fallout

continued, from the company's decision to charge a

$5 monthly fee to customers using their debit cards to make purchases

.

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Other major financial names seeing 4% declines to round-out the month included

Bank of New York Mellon

(BK) - Get Bank of New York Mellon Corporation Report

, closing at $18.59;

Comerica

(CMA) - Get Comerica Incorporated Report

, at $22.97;

First Niagara Financial Group

(FNFG)

, at $9.15;

Huntington Bancshares

(HBAN) - Get Huntington Bancshares Incorporated (HBAN) Report

, at $4.80;

JPMorgan Chase

(JPM) - Get JPMorgan Chase & Co. (JPM) Report

, at $20.12;

New York Community Bancorp

(JPM) - Get JPMorgan Chase & Co. (JPM) Report

, at $11.90; and

SunTrust

(STI) - Get SunTrust Banks, Inc. Report

, which closed at $17.95.

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--

Written by Philip van Doorn in Jupiter, Fla.

To contact the writer, click here:

Philip van Doorn

.

To follow the writer on Twitter, go to

http://twitter.com/PhilipvanDoorn

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Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for TheStreet.com Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.