Investing.com - European stocks sank in Friday trade, following the resignation a of key European Central Bank official and the implications for ongoing efforts by the ECB to address the region’s sovereign debt crisis.
At the end of Friday’s European session, the STOXX 50 Index slumped 4.15% to 2,073.67, France’s CAC fell 3.6% to 2,974.59, Britain’s FTSE gave up 2.35% to 5,214.65, and Germany’s DAX surrendered 4.04% to close at 5,189.93.
Earlier Friday, European Central Bank Governing Council member Juergen Stark, told ECB President Jean-Claude Trichet he would be leaving his post on the six-member Executive Board for “personal reasons.”
Last month, it was widely reported that Stark was opposed to the ECB’s resumption of its bond-buying program where it purchased large amounts of Spanish and Italian debt in an effort to curb the spread of debt contagion in the euro-zone.
Trichet admitted in August that the central bank had not voted unanimously to resume bond purchases but that an “overwhelming majority” of the 23-member Governing Council had approved the move.
Meanwhile, finance ministers from the G-7 met in Marseille, France to discuss Europe’s debt crisis as well as the financial stability of the region’s banks.
Banking issues took center stage in London Friday, ahead of next week’s recommendations from the U.K.‘s Independent Commission on Banking, which is expected to outlay suggested steps financial institutions should take to protect themselves from riskier investment banking options.
Barclay’s PLC plummeted 9.43% while Royal Bank of Scotland PLC slumped by 5.45%.
France’s Societe General SA plummeted 10.6 in Paris, along with Credit Agricole SA which lost 7.7%. Commerzbank AG retreated 8.7% in Frankfurt.
In Germany, shares of Porsche Automobil Holding SE nosedived 12.1%, the automaker’s steepest decline in two years, on delays of its planned merger with Volkswagen AG due to pending lawsuits.
Meanwhile in afternoon trade on Wall Street, the Dow Jones Industrial Average was down 2.3% to 11,033.10, the Nasdaq Composite Index fell 1.81% to 2,483.30 and the S&P 500 was lower by 2.06% at 1,161.48.