Shares in British banks were broadly down on the FTSE 100 in morning as gloom about the global economy descended on the market.
The Greek debt crises continued to rumble on, leading to increasing concerns that Greece will default, precipitating another Lehman Brothers style financial crisis.
European Union leaders are due to meet later today to hold talks on the issue.
In addition the U.S. Federal Reserve yesterday downgraded its outlook for U.S. economic growth in 2011, while Citigroup downgraded its forecasts for 2011-12 growth for the U.S., Great Britain and the eurozone.
If this were not enough for the market to digest China also saw factory-sector growth come close to a halt, thanks to weakening global demand and tougher monetary policy.
By 09:40 shares in Lloyds Banking Group were down 2.28 per cent to 45.93 pence per share, RBS shares declined 2.25 per cent to 37.78 pence per share and Barclays shares fell 1.68 per cent to 248.05 pence per share.
HSBC however saw its shares rise 0.22 per cent to 606.90 pence per share.
Overall the FTSE 100 was down 0.57 per cent to 5,740.34.