September 12, 2011
World stock markets fell on Monday as the growing prospect of a Greek default sent banking shares tumbling across Europe.
The escalating financial crisis hit the French and German stock markets particularly hard, and pushed Italy's borrowing costs up sharply.
France's three biggest banks all plunged by more than 10%, after senior German politicians appeared to accept that Greece may be forced to quit the eurozone, sending the French CAC down 5.5%. Germany's DAX index fell more than 3% to its lowest level since July 2009.
In London, 144 points were wiped off the FTSE 100 at one stage, with the index of blue-chip stocks down 2.6% to 5071.
Speculation swept the City that Greece is sliding towards the eurozone exit, despite imposing a new property tax in an attempt to keep its fiscal plans on track.
"Eurozone officials have appeared to be taking a hardline stance on Greek in recent sessions suggesting that the country may not see the next tranche of its bailout funds without more austerity," said Jane Foley of Rabobank.
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