The major UK banks are falling as the market absorbs the wider implications of Barack Obama's plans to keep US banks on a tighter leash.
Fund managers say UK-based banks Barclays, HSBC, Standard Chartered and Royal Bank of Scotland, with investment banking exposure to the US, are under the greatest threat from Obama's proposals.
These include curbing inhouse trading and barring investing in or managing hedge and private equity funds.
Barclays is trading at £2.66, or 6.0% down; HSBC at £6.64 is 1.7% below; Standard Chartered's £14.20 asking price is 1.0% off; and RBS at £33.84 is 4.2% down. Banks have been a drag on the FTSE which was down 1% to 5286.56 in mid-afternoon trading.
In the US the Dow Jones Industrial Average fell sharply on opening, but is only 0.7% down, at 10,316.8 points now.
Bank of America Corp is off 2.2% at $15.14, but the market is rewarding General Electric Co, which beat analyst expectations for its fourth quarter profit.
Meanwhile, a study from US analysts Preqin pinpoints Goldman Sachs, Bank of New York Mellon, Credit Suisse and JP Morgan as most at risk from Obama's proposals. All three have large hedge fund propositions.
‘Important to have an anchor’
Report to be written by TPR
Lack of innovation for solutions
Some 2,000 consumers affected