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Figures from Digital Look, a UK-based financial information website for private investors, nearly £39bn in market capitalisation alone has been wiped off HBoS after it was plunged into distress on the back of market turmoil.

Lloyds TSB has similarly lost more than £19bn in market value in the last three years.

Andy Yates, director of Digital Look, said the huge loss in the value of shares would largely be borne by pension funds, insurance companies and small private investors.

Mr Yates said: “It will help force down pension payments and push up the cost of life, car and house insurance.

“Every bank bail out that leaves the shareholders in the cold is just going to add to that problem.

“Reminding shareholders that they take risks and making sure the City feels bad about itself is fine, but only up to a point.

“From here on in I think there might have to be a bit more attention paid to solutions that deliver maximum value to shareholders as well as creditors and taxpayers.

“Taxpayers are investors. Perhaps we need a few more cures that do not kill the patient,” he concluded.

Digital Look estimated that the average UK pension fund has about 25 per cent of its investments in UK equities and recent volatility may have unravelled the government’s intention to get more people to save into a pension.

Mr Yates said: “These are unconventional times and the government has already had to do some pretty unusual things. Perhaps they need to make it known that they will be ready to take equity stakes in banks to cushion their regulatory capital.”

Brian Capon, assistant director for media for the British Bankers’ Association, said any sector would experience rises and falls therefore a dip in bank shares in the current climate isn’t unexpected.

Mr Capon said: “Not all banks have been affected to the same extent and bank shares, like any others, can go down as well as up.

“These things tend to go in cycles and while obviously we cannot tell for certain what is going to happen in the future the sector is on the whole well capitalised and may rise again over the longer term.”