The biggest reaction is in Europe, where the prices of Spanish and Portuguese bonds fell again and the price of protecting against a default on Belgian debt surged 13% (see CMA chart, right).

Credit default swap spreads also soared on Dexia, the biggest Belgian bank, which is operating with state support thanks to a 2008 bailout by the governments of Belgium, Luxembourg and the Netherlands. Dexia isn’t the basket case that Ireland’s banks are, but it is almost twice as large, by assets, as Belgium’s economy, raising a question or two about what anyone might do should it run into funding trouble again.

U.S. bank stocks are flattish Monday, with the KBW banks index up fractionally. But the CDS spreads on big U.S. lenders such as Bank of America (BAC), JPMorgan Chase (JPM) and Wells Fargo (WFC) all rose 3% or 4% Monday.

It is only one day, and who knows what might be behind it. It could be questions about the giant U.S. banks in light of the euro mess, but it could also be tied to the mortgage fiasco or any number of other things.

In any case, as Janney Montgomery Scott’s Guy LeBas noted last week, it is a trend well worth watching.