France

Dexia, the bank bailed out by the French, Belgian and Luxembourg governments, loaned €1.5bn to two of its investors who then used the cash to buy shares in the company, it has been claimed.

EURO PLAYTHING

Germany has cut its economic growth forecast over fears its exports will slow, the BBC reports.

Credit agency Moody's has cut the rating of Spanish government bonds by two notches, echoing Standard & Poor's decision two days ago.

Rating agency Moody's has issued a warning on France's AAA-credit rating, saying it may downgrade its outlook for the country based on its overstretched budget.

The FTSE 100 was 1.3% lower this morning after slowing Chinese GDP data and a Moody's warning over France's AAA-rating weighed on sentiment.

Eurozone banks may have to raise €200bn to boost their capital reserves under a proposal from the European Banking Authority (EBA).

Managers fear France could be the next European nation in line for a downgrade as it steps in to support beleaguered bank Dexia.

French bank shares have dropped after ratings agency Moody's downgraded two institutions due to their exposure to the eurozone debt crisis.

French regulators have failed in an attempt to extend the short-selling ban to major European stock markets, allowing investors to bet on further falls in financial stocks, the FT reports.