22nd September 2011
The FTSE 100 has fallen by five per cent in trading this morning (September 22nd) following bank downgrades and weak US data.
Following a 2.5 per cent downturn on the Dow Jones yesterday evening, the FTSE 100 followed suit this morning with even greater losses, while Asian markets also felt the pinch.
The IMF's top financial stability official Jose Vinals commented: "Sovereign [debt] risks have spilled over to the region's banking system.
"This has put funding strains on many banks in the euro area and has depressed their value."
An IMF statement revealed a black hole of £263 billion has been created in the books of the largest European banks over the last three years due to the difficulties connected to the eurozone crisis and the more general slowdown in the global economy.
In addition, a trio of the biggest banks in the US - Citigroup, Bank of America and Wells Fargo - saw their credit ranges downgraded.
Last week, Reuters reported a strong commodities market saw rallies on the FTSE 100, but these gains have now been all but wiped out.
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