Shares in UK banks plunged again as fears over the fallout from Britain's decision to leave the European Union sparked earnings downgrades and sell-offs by shell-shocked investors. As Sonia Legg reports, Europe's banks weren't immune from Brexit anxiety either.
HSBC may move 1,000 staff from London to Paris if Britain leaves the European single market, that's according to some media reports. It all added to the pressure on European bank stocks as markets opened on Monday. Barclays, Lloyds and Royal Bank of Scotland, seeing further falls of 18, 10 and 23 percent respectively. The STOXX Europe 600 bank index hit its lowest since June 2012, raising yet more questions about the impact of a Brexit on London's mightily financial sector. (SOUNDBITE) (English) IHS GLOBAL INSIGHT, DIRECTOR OF SOVEREIGN RISK, JAN RANDOLPH, SAYING: "The regulatory regime will swing back over to the euro zone and the City of London will no longer have a voice in that regime. We may lose certain passport rights in terms of selling euro-based products into what is the largest market in the continent." Britain's European Commissioner for Financial Services resigned over the weekend. Jonathan Hill's position untenable outside the EU, even though his new regulations have helped strengthen the European banking sector. (SOUNDBITE) (English) BGC PARTNERS MARKET STRATEGIST, MIKE INGRAM, SAYING: "Authorities have done much good work to improve and increase the resilience of the global financial system. Banks in the UK have something like ten times the capital that they had in 2007, 2008." UK banks weren't the only ones to suffer. Numerous continental lenders including Spain's Bankia, Credit Suisse and Italy's Unicredit had their earnings expectations downgraded by analysts - the worry, rising political risk and less chance of lower equity costs. Italy's government says it's now looking at options to try and prop up the country's bank stocks.