The mood among German analysts and investors has worsened in February for the second month in a row due to concerns about the global economy and uncertainty over the effect of falling oil prices.
The ZEW think tank's monthly economic sentiment index fell to 1 points in February from January's 10.2.
The Mannheim-based ZEW said the share and bond prices of banks in Europe, the US and Japan had fallen as investors fear the current climate of uncertainty increases the risk of a credit default for lenders.
Analysts said that investors would now look to the European Central Bank for possible new measures in March to promote economic expansion.
But there was increasing concern about whether the ECB's monetary policy was able to spur growth.
"Given institutional, legal and political constraints, the 'more of the same' option seems in our view the most likely one for the March meeting," they said.
The German economy grew by 1.7% in 2015, and the government has revised down its growth forecast for 2016 to the same figure as a slowdown in emerging markets weighs on the traditionally export-driven economy.
Analysts said the index was an indication that first-quarter GDP would stagnate in annual terms. Other analysts said the mood among investors was worse than the economic reality.
The US is expected to post growth in the first quarter and the euro zone economic recovery is expected to continue, which would support Germany, they said.
There was no tangible evidence that the global economy was already slowing, they added.
A separate gauge of current conditions fell to 52.3 points from 59.7 in January.
The ZEW index was based on a survey of 214 analysts and investors conducted February 1-15.
