George Osborne has said efforts in Europe to tackle the economic crisis are currently falling short of what is needed, warning the billions pledged by governments so far are not enough.

China's state controled sovereign wealth fund has begun investing in the country's banks after shares hit a 30-month low.

Cazenove's European fund manager, Chris Rice, said there has been an effective "arms race" among investors to buy into defensive companies such as Nestlé amid the recent sell-off.

Former Prime Minister Sir John Major has told the BBC Europe must recapitalise its banks and Greece "needs to default" on its debts, to help bring an end to the eurozone debt crisis.

Cazenove's European fund manager Chris Rice has said he expects policymakers across Europe to stand firm and keep the eurozone intact despite growing expectations parts of it will break away.

Mervyn King has warned Chancellor George Osborne the UK recovery is facing a growing threat from the euro crisis and deteriorating conditions in financial markets.

The FTSE 100 made up some of the ground lost in recent days, gaining over 100 points in early trading, amid talk in Europe of plans to recapitalise the banking system.

Liontrust Asset Management said today it had completed the takeover of Occam but for a much lower price following a fall in assets under management.

Ratings agency Moody's has slashed Italy's credit rating, piling more pressure on the beleaguered eurozone.

Wall Street bankers who feel they have been singled out to blame for the financial crisis are refusing to fund President Barack Obama's next election campaign, Warren Buffett has said.