Following the resignation of the Citigroup boss, stock markets in Asia fell sharply, while falls were also reported in London, Paris and Frankfurt.
Commenting on his departure, Prince confirmed that his position had become untenable as a result of the company’s profit losses. He said: “Given the size of the recent losses in our mortgage- backed securities business, the only honourable course for me to take as chief executive officer is to step down.”
However, Chancellor Alistair Darling suggested that the different structure of the UK market would mean that the US market turmoil would not adversely affect UK lenders. He said: “Despite this international uncertainty, which started from the problems in the US housing market, there are grounds for believing that we will get through this.
“We have a strong economy; its momentum will carry us through.”
William Claxton-Smith, from Insight Investments, admitted that the FTSE market was facing uncertain times.
Speaking to the BBC, he said: “The market is very concerned about what is going on in the banking sector. The big problem is the uncertainty that nobody really seems confident that anyone has got a handle on what is happening.”
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