Lloyds

The Independent Commission on Banking (ICB)'s plans to ring-fence will have a very limited impact on the UK's economic output, according to Ernst & Young.

Analysts are underestimating the extent of the problems facing the banking sector, in a scenario reminiscent of the collapse of Lehmans, said Colin McLean, managing director of SVM.

The UK's index of 100 leading shares fell 2.76% to below 5,000 this morning, as global markets showed no signs of shaking off fears the West is heading back into recession.

The UK's major banks remain on course to meet their targets for lending to businesses as part of their commitment to Project Merlin.

Sharp falls in bank and mining stocks have dragged the FTSE 100 down a further 3.4% today as global markets continued to struggle.

Taxpayer-backed Lloyds Banking Group has posted a loss of £3.3bn in the first half as it was hit with claims for the mishandling of payment protection insurance (PPI).

Clive Cowdery, the self-made insurance tycoon who gives away much of his wealth, is considering a surprise bid for the 630 bank branches being sold by Lloyds Banking Group.

UK banks were not among the eight institutions to fail the European stress tests on the sector.

Deputy Prime Minister Nick Clegg has backed proposals to give the public shares in part-nationalised banks RBS and Lloyds.

Shares in Barclays and its peers moved higher in early trading despite the bank's move to settle PPI claims.