The Westpac Banking Corp (ASX: WBC) share price is down almost 15% in 2016. And we’re only six weeks in!

Source: Google Finance

Source: Google Finance

Westpac’s share price, like that of its major bank peers, has struggled to gain traction over the past year. In fact, since Westpac’s share price peaked in April 2015, the bank’s share price is down some 28%.

For comparison, the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) is down almost 10% in 2016 and 17% in 12 months.

What’s going on?

Any first-level investor could tell you when the economy slows, so too will bank profits. Inherently cyclical, banks are more leveraged to the market cycle than an ordinary industrial business. And when the cycle turns on its head, it’s not always pretty.

But when coupled with burgeoning household debts, increased regulation, cooling property markets and lofty valuations, the major banks were always likely to come under significant selling pressure as their record profits begin to taper off. Indeed, falling margins and increasing competition are bringing share prices back towards economic reality, in my opinion.

Foolish takeaway

Much like that of its major bank peers, the Westpac Banking Corp share price has fallen by the wayside as investors come to grips with the tougher economic outlook. Investors should now be assessing whether its worth holding exposure to the Australian banking sector during this time. In my opinion, Westpac shares are close to a sell.

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Motley Fool writer/analyst Owen Raszkiewicz does not have a financial interest in any company mentioned. Owen welcomes -- and encourages -- your feedback on Google+, LinkedIn or you can follow him on Twitter @ASXinvest.

Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.