Banks pushed the FTSE higher by 0.55% to 5380.35 on news the Basel Committee proposed to water down its capital and liquidity reform package.

Business secretary Vince Cable said banks should be 'very, very self-conscious' about how they reward staff and investors and refused to rule out a tax on bank profits.

The Treasury is proposing setting up separate compensation schemes and ending the current cross-subsidy between different classes of FSCS levy payers.

A base rate of 0.5% will begin to look like the 'new normal' with hikes unlikely until 2014, according to a leading economic forecaster.

Lifemark, one of the life settlements groups behind Keydata, could be facing liquidation after US hedge fund CarVal pulled a $60m rescue offer, according to reports.

Widespread chaos has been predicted in the bond markets as the world's three largest ratings agencies said their ratings could not be used in any marketing material.

AIG, the insurer that received £119bn in emergency funding during the financial crisis, is expected to appoint former Pru CEO Mark Tucker as head of its Asian business, AIA.

Fidelity has appointed Pete Burtonshaw as head of platforms with overall responsibility for both FundsNetwork and the DC propositions.

Equitable Life has appointed BlackRock to provide investment and risk management services for its 400,000 policyholders and group scheme members.

Warren Buffett's annual donation to the Bill & Melinda Gates Foundation rose with the value of Berkshire Hathaway stock this year by 30% to around $1.62bn.