Goldman Sachs has downgraded its recommendation on exposure to European bank debt from overweight to neutral, citing the lack of clarity on Credit Suisse's future path as a cause for concern.

The Swiss central bank recently extended a $54 billion lifeline to Credit Suisse to shore up liquidity, but this has not been enough to stabilise sentiment in the equity and credit markets.

Goldman Sachs analyst Lotfi Karoui has noted that the sector's fundamentals are stronger than they were 15 years ago, and global systemic linkages are weaker, which limits the risk of a potential vicious circle of counterparty credit losses.

However, Karoui believes that a more forceful policy response is needed to bring some stability to the sector. Credit Suisse is facing a make-or-break weekend after some rivals grew cautious in their dealings with the bank and regulators urged it to pursue a deal with Swiss rival UBS.