Bank shares have fallen in London after the UK said it would "resist" a financial transaction tax on EU members proposed by the European Commission.
The tax would raise about 57bn euros ($78bn; £50bn) a year and would come into effect at the start of 2014.
At close, Royal Bank of Scotland was behind by 3.64%, Lloyds Banking Group by 2.4%, and Barclays by 1.31%.
London would be hardest hit by the tax as the majority of banking transactions in Europe come through the city.
'Tax on London?'
City of London officials have said that about 80% of the revenues of any Europe-wide financial tax would come from London.
Stuart Fraser of the City of London said the question had to be asked whether the proposal was "a tax on London?".
Mr Fraser also warned that such a tax could mean a lot of banking transaction being lost to outside of the EU, and that the cost of setting up the scheme could outstrip whatever monies it raised.
Under the proposals, the financial tax would be levied at a rate of 0.1% on all transactions between institutions when at least one party is based in the EU. Derivative contracts would be taxed at a rate of 0.01%.
The BBC's business editor Robert Peston said that while dealers and investors in financial products such as derivatives and bonds were not happy about the proposal, share dealers were more relaxed as the tax would cost less then the existing stamp duty, which the tax would replace.
Meanwhile, in Germany and France bank shares also fell at close, and the European Banking Federation called the tax a "nonsense".
Among the market losers were Deutsche Bank and Commerzbank in Germany, and Societe Generale and BNP Paribas in France.
9/29/11
European Commission financial tax opposed by UK
1:26 AM
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