Triage by government officials—including arranging the sales of Washington Mutual Inc. and Wachovia Corp.—is designed to steady the financial services industry.

But rather than providing relief, the moves may instead be contributing to a "who's next" mind-set.

"It may be totally irrational, but the market is calling the shots right now — not reality, not solvency, not anything else," said Nancy Bush, the president of NAB Research LLC, in an interview Tuesday. "So no bank, with the exception of a few of the biggest, can say right now that it's invulnerable."

Indeed, investors have turned their skeptical eyes on National City Corp., the Cleveland banking company wounded by faltering mortgages.

Its shares plunged 63% Monday after the House rejected the Bush administration's bailout plan, forcing lawmakers in favor of it to plead for more support and a second vote by week's end.

The speed of this domino effect has been startling. In the space of 11 business days, Lehman Brothers Holdings Inc. went bankrupt, the insurer American International Group needed a government bailout, Washington Mutual Inc. failed and surrendered its bank to JPMorgan Chase & Co., and then Wachovia Corp. fled into the arms of Citigroup Inc., assisted by regulators.

"It wasn't an imminent problem of failure with Wachovia — they had the deposits, the geography. I wouldn't have picked them as being next if you'd asked me a week ago," Ms. Bush said. "But the fact is, regulators are worried about a run on banks, and they are picking and choosing their spots where there is concern about a run, because if we get a full-fledged run on banks, we are toast. So if the market thinks you're vulnerable, you don't really know if your bank is next."

Now, with a $700 billion federal bailout of banks' toxic mortgage assets in limbo, the markets are expecting a continuation of the consolidation-before-a-run trend.

The $154 billion-asset Nat City has recorded three straight quarterly losses, including a record $1.76 billion in the second quarter, due in large part to a loan-loss provision of $1.6 billion.

The Wachovia deal contributed to the plunge in Nat City's shares Monday, observers said, because some viewed Nat City as standing alongside Wachovia in the line of vulnerable banks.

So what happens if a financial rescue isn't approved soon? It depends upon whom you ask.

Nat City staunchly defends its capital levels, noting it raised $7 billion in April and lifted its Tier 1 capital ratio above 11%, the highest among regional banks in the country.

It has downsized its mortgage business, reduced its work force steadily since last fall, and says it is in no danger of failing and does not need a buyer. It also has hired an executive to handle the disposal of bad assets.

Nat City spokeswoman Kristen Baird Adams said Tuesday that the company is the victim of "outright irrational speculation and investor panic," owing to uncertainty in Washington and unfair comparisons to Wachovia and Wamu. She said it has no exposure to option adjustable-rate mortgages, the home loans that scarred Wachovia and Wamu.

Nat City has "more than sufficient" capital and liquidity to survive "as an independent institution," Ms. Adams said.

Several analysts agree.

Terry McEvoy of Oppenheimer & Co. Inc. on Monday upgraded Nat City's stock from "market perform," to "outperform," citing what he views as capital strength and an undervalued stock.

Paul Miller, an analyst at Friedman, Billings, Ramsey & Co., made the same upgrade Monday, and in a note to clients he wrote that a sell-off in Nat City's stock — including a 26% drop last Friday — "is overdone." He also noted that Nat City's shares plunged after the failure of IndyMac Bancorp Inc. in July on "fears of a run" on deposits at Nat City "but rebounded as confidence returned."

"National City's peer-high capital ratios should be more than adequate for the company to work through its problem loan portfolios," Mr. Miller wrote.

And, notably, Nat City shares rebounded Tuesday, rising 29%, albeit to $1.75, or off 94% from their 52-week high of $27.21.

That Nat City's shares remain so depressed has investors questioning its ability to withstand a prolonged downturn — especially if credit markets truly freeze and the bailout plan fails altogether. Some skeptics note that Nat City executives have not shed light on when they expect to return to profitability.

"When you're trading below five bucks a share, history is not on your side in terms of recovery," David Allaire, portfolio manager for Mystic Asset Management Inc., said in an interview Tuesday. "If we don't get a bailout bill soon, I think the feds just might step in and put Nat City out of its misery, force a sale."