Shares in British banks were down on the FTSE 100 despite attempts by policy makers to ease fears about sovereign debt in the eurozone.

Eurozone ministers have confirmed a deal on the Special Purpose Vehicle, which will be used to provide up to 400 billion euros in loans to countries in danger from a sovereign debt disaster.

Meanwhile theUS Chairman of the Federal Reserve, Ben Bernanke, said that despite the problems in the eurozone, members of the single currency were still committed to its future and would be able to support those struggling with their debts.

Mr Bernanke also said that the US economy was strong enough to avoid a double dip recession, thanks to stronger consumer and business spending.

Despite these reassurances in early morning trading Lloyds Banking Group, RBS and Barclays saw their shares declined in value by 0.1 to 1.2 per cent, while HSBC shares rose 0.2 per cent.

However later in the morning all of the big four banks were down.

By 09:49 shares in Lloyds Banking Group were down 1.87 per cent to 52.89 pence per share, RBS shares dropped 2.41 per cent to 42.05 pence per share, Barclays shares declined 2.48 per cent to 278.80 pence per share while HSBC shares fell 0.68 per cent to 625.10 pence per share.

Overall the FTSE 100 was down 0.92 per cent to 5,022.05.