Worries about the capital requirements of European banks have dragged Wall Street sharply lower at the start of US trading, the first since the long holiday weekend for Labor Day.
The Dow Jones Industrial Average is down more than 80 points, helping to keep the FTSE 100 in negative territory, 47.30 points lower at 5391.89. The concerns stem from the proposed new Basel 3 rules, which indicate tougher capital requirements for the banks, and could in turn lead to them needing to raise new funds and put pressure on their dividends. Sentiment has also been soured by a report in the Wall Street Journal suggesting the recent stress tests might have underestimated their holdings of potentially risky government debt.
At the same time came the news of changes at the top at Barclays, down 9.35p at 313.5p, and HSBC, 0.8p lower at 662p. Royal Bank of Scotland is down 0.99p at 45.96p while Lloyds Banking Group is off 0.52p at 72.36p.
