The $43 billion in write downs represent a loss of about 5.5% of equity book value of those financial institutions affected. I have tallied up all write downs and book values of banks reporting write downs, you can see the spread sheet here.
attributed to the amount of write downs.In the chart below you can see that price decline correlated well to the amount of write downs by financial The group suffered a 18% decline in market price over the last six months since the credit and sub-prime debacle began. The price decline represents three fold to the the amount of write downs reported, write downs represent only 6% decline in equity book value for those banks reported write downs. Investors, although, have punished the entire sector, it seems that price declines are proportionately correlated to the magnitude of the write down institutions reported.
I do not think the market have overdone the selling of financials in this case. Investors are anticipating even more bad news from the sector and this have a high probability chance of occurring, particularly in an environment of slowing economic activity and deteriorating housing industry.