UK banks dragged into eurozone crisis as global markets take fright

Lloyds, RBS and Barclays take £5bn hit as stock and commodity prices plummet, while US urges Europe to be more decisive More than £5bn was wiped off the value of three of Britain’s biggest banks on Monday as global financial markets took fright at the deepening crisis in the eurozone. Stocks fell heavily in Europe and North America while gold rose to a new record of more than $1,600 (£995) an ounce amid concerns that Thursday’s emergency summit of EU leaders would once again fail to resolve the debt problems of the single currency’s weak members. Officials from eurozone countries were on Monday trying to resolve the row between Angela Merkel and the European Central Bank (ECB) over a possible Greek debt default after a day of turbulence that saw bank shares tumble in late trading. Jean-Claude Trichet, the president of the ECB, is resisting pressure from the German chancellor for Greece’s private sector creditors to bear some of the losses of a default, but senior policymakers admitted that it was now vital Thursday’s talks in Brussels come up with a credible plan that will restore market confidence after shares, government bonds and commodities all suffered sharp losses. Sources said one option was to convert much of Greece’s debts into longer-term bonds, an approach used during the Latin American debt crisis of the 1980s. Lloyds, Royal Bank of Scotland and Barclays were the biggest fallers on the FTSE 100, all losing at least 6% of their value as jittery investors digested the results of Friday’s stress tests on European banks , mulled the prospect of the US

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