Shares in British banks were broadly down on the FTSE 100 in morning trading after news from Ireland and Spain appeared to discourage investors.

In Ireland the nation's central bank said that the bail out of Anglo Irish Bank would cost 34 billion euros in the worst possible case. In addition the central bank said that Allied Irish Banks needed to raise another three billion euros before the end of the year.

Meanwhile Moody's ratings agency said it had downgraded Spain's credit rating from AAA to Aa1, due to the country's weak prospects for economic growth.

By 10:40 shares in RBS were down 1.15 per cent to 47.34 pence per share, Barclays shares declined 0.93 per cent to 302.40 pence per share and HSBC shares fell 0.83 per cent to 643.60 pence per share.

Lloyds Banking Group proved the exception however, with shares up 0.11 per cent to 74.38 pence per share.

Overall the FTSE 100 was down 0.32 per cent to 5,551.11.