Financials were among the biggest losers as the FTSE 100 slumped this afternoon, driving the index down by 74.58 points (1.87%) to 3,918.96.
Royal Bank of Scotland (RBS) has been the afternoon's biggest loser, down 7.72% to 27.5p while Old Mutual has dropped 7.59% to 53.6p, as at 3.09pm GMT.
It comes after RBS announced 9,000 staff could lose their jobs in the next two years, with half of them in the UK.
RBS has also announced that its latest placing and open offer has been rejected by investors with only 0.7% taking it up. This means the government stake in the bank has risen from 58% to 70%.
Lloyds Banking Group has also fared badly in this afternoon's trading, falling 7.03% to 74.1p.
Aerospace company BAE Systems has been the FTSE's biggest winner, building on its morning gains, up 6.7% to £3.50.
In the US, the Dow Jones has fallen 170.1 points (2.13%) to 7,805.73.
General Motors has been its biggest loser, down 6.21% to $2.13 amid reports the company was speeding up preparations for bankruptcy.
Aluminium producer Alcoa was also down 4.68% to $7.54 after analysts predicted the company would make a first quarter loss of $0.56 per share as global demand takes its toll.
Microsoft has been the Dow's largest gainer this afternoon, up 1.28% to $19.Investment Week
All-day event on 24 April
Consequences could be more severe than in stress tests
AFH has six segregated mandate funds
Variable operating expenses