European bank shares took a hammering today amid concerns that governments across Europe might follow the lead of US President Barack Obama and introduce tough new restrictions on the finance sector, according to dpa. As European trading for the week came to the end, shares in Europe's leading banks were down by as much as 8 per cent as a result triggering falls of more than 1 per cent in European stock markets. Bankinter managing director Jaime Echegoyen, whose bank fell by 1.24 per cent on the Madrid stock exchange, said measures similar to those that were being planned in the United States would not make sense in the Spanish banking environment. It would be "unfair" to impose responsibility fees on Spanish banks, which had not been bailed out like US banks, Echegoyen said. Shares in New York opened down 0.54 per cent as a wave of uncertainty hit investors about the White House campaign against risk taking, which still have to be set out in detail. Europe's key stock market in London was ending the week down after Obama's announcement sent shockwaves though the British banking sector Friday with leading bank shares plummeting on a nervous London stock market. Obama's drive to introduce curbs on banks took the market by surprise with shares in financial houses with extensive links with the US hit hard by the President's attack on banks. Britain's Barclays, which acquired Lehman Brothers' North American trading and investment banking assets in 2008, topped the fallers' list as its shares dropped by 8 per cent to 259.6 pence. Barclays' significant exposure to the US market sparked speculation Friday that the bank, which declined to take part in the government's 2008 massive bailout package, could be forced to call on shareholders to boost its capital position. In Germany, the nation's biggest bank Deutsche Bank was down by about 5 per cent in late afternoon trading with the falls in Europe stocks coming in the wake of steep drops in shares across Asia. Responding to the Obama plans for banks, a spokesman for Germany's Finance Ministry in Berlin said the move would help to give momentum to reform of the global financial system. France also welcomed the White House move. Friday's share market sell off followed a 10-month rally in global stocks and came amid concerns about rising interest rates in China after figures released Thursday showed the nation's economic growth bounded ahead by a year-on-year 10.7 per cent in the fourth quarter last year. In the meantime, giant Swiss bank UBS's shares slumped by 4.57 per cent as the rout in banking shares gained ground across Europe with the Zurich stock market falling 1.6 per cent in late Friday trading. Paris fell 1.23 per cent after shares in the nation's top banks also took a hit. In the Netherlands, ING Bank stock fell by more than 3 per cent in afternoon trading, while banking and insurance company Aegon dropped 0.98 per cent. Spain's main Ibex-35 index fell by 1.4 per cent by the early afternoon, with all the main banks suffering losses. Banco Sabadell plunged by only 0.31 per cent while the two biggest banks, Santander and BBVA, lost as much as 2.55 and 2.05 per cent, respectively. Royal Bank of Scotland (RBS) was also down by 8 per cent while the shares of Lloyds Banking Group fell by 1.9 per cent.
