Shares in British banks were broadly down on the FTSE 100 as the eurozone debt crisis continued and tensions erupted between North and South Korea.

At the beginning of this week Ireland confirmed that it was negotiating the final terms of a bailout from the European Union and the International Monetary Fund, believed to be worth 80 billion to 90 billion euros.

The news did little to reassure the markets about the state of the eurozone, with Irish, Spanish and Portuguese ten year gilt yields rising sharply yesterday. Following Ireland's bailout there are fears that Portugal and even Spain may also need their own bailouts.

Meanwhile on the other side of the world North Korea started bombarding the South Korean island of Yeonpyeong, killing two South Korean marines. South Korean forces returned fire on the North and have been placed high alert.

By 11:40 shares in Lloyds Banking Group fell 1.28 per cent to 63.11 pence per share, Barclays shares dropped 1.68 per cent to 265.45 pence per share and HSBC shares declined 0.86 per cent to 648.20 pence per share.

However RBS shares rose 0.20 per cent to 39.92 pence per share.

Overall the FTSE 100 was down 0.53 per cent to 5,650.51.