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NEW YORK ( TheStreet) -- As of this writing, threats that Greece will default on its debt have European markets in turmoil. Rumors of a bailout by France and Germany were denied by both governments.
European Bank Stocks PlummetingAs a result, European banks like Société Generale, Crédit Agricole and Deutsche Bank are watching their stock values plummet. Absent an eleventh-hour agreement from other nations in the eurozone to prop up Greece, however, many analysts are predicting another European recession that will echo in markets worldwide. European bank stocks can only suffer additional losses if that occurs.
U.K. Bank Reforms a 'Net Negative'Meanwhile, U.K. banks were hit Monday with a bill for more than $11 billion each year to put into place sweeping new reforms proposed by the Independent Commission on Banking. The new rules would require banks to segregate their retail activities from their investment banking operations. The "ring-fenced" retail divisions would be required to operate independently and to conduct all transactions with their investment banking counterparts at arm's length. Additionally, the largest banks would be required to hold as much as 20% in equity and loss-absorbing debt against their assets. According to The Wall Street Journal, bank analysts at Citigroup (C - Get Report) call the proposal a "net negative" for U.K. banks. Again, U.K. banks can expect their stock prices to fall if the proposal ultimately goes through.