Shares in British banks fell on the FTSE 100 in morning trading on Monday after yet more bad news from the eurozone gave investors the jitters.
The European Central Bank said that eurozone banks could be hit be a "second wave" of write-downs costing up to 195 billion euros over the next one and half years. In addition the ECB said it had bought more eurozone government bonds.
The eurozone was also given a fresh hit when Fitch Ratings agency downgraded Spain from AAA to AA+ on Friday.
The central bank in Spain recently took over struggling bank CajaSur, while the government has also passed austerity measures aimed at preventing Greek-style sovereign debt problems. The measures increased fears that a eurozone recovery may be slower than initially hoped for.
By 11:32 shares in Lloyds Banking Group were down 3.45 per cent to 55.72 pence per share, RBS shares declined 2.10 per cent to 45.75 pence per share, Barclays shares fell 3.36 per cent to 294.85 while HSBC shares dropped 0.24 per cent to 626.30 pence per share.
Overall the FTSE 100 was down 2.09 per cent to 5,080.29.