Banks lead FTSE into negative territory

Bank shares have deepened losses after the downgrade of 12 UK financial institutions by Moody's, pushing the FTSE 100 into negative territory.

Royal Bank of Scotland, Lloyds Banking Group and Barclays are the three biggest fallers in the blue-chip index, which was down 0.1% at 5,284 shortly after midday. RBS fell 4.35% to 23.3p, the drop fuelled by reports it could require fresh capital if European policymakers moved to recapitalise their banks. Lloyds Banking Group dropped 3.6% to 34,6p and Barclays, which was not downgraded by the ratings agency, fell 3.4% to 162p. Moody's move concludes a review of the financial sector begun in May after several major UK banks received government bailout cash. The ratings agency sai...