Shares in British banks were down on the FTSE 100 in morning trading as investors shied away due to the exposure of RBS to Ireland's ongoing debt crisis.

Yesterday the governor of the Irish central bank said that bank bailouts had failed to restore confidence to investors and added that foreign buyouts may be necessary to save struggling Irish institutions.

In the third quarter RBS said that its business in Ireland, Ulster Bank, made a loss of £176 million, thanks to bad loans worth £286 million.

By 10:10 shares in Lloyds Banking Group were down 0.92 per cent to 66.97 pence per share, RBS shares declined 3.72 per cent to 40.59 pence per share, Barclays shares fell 1.74 per cent to 284.55 pence per share and HSBC shares dropped 0.83 per cent to 683.90 pence per share.

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