The meeting between German Chancellor Angela Merkel and French President Sarkozy yesterday, failed to produce anything new, which more or less met expectations.

However they have put forward a Banking transaction tax, that has been turned down before and this has not been well received by the equities markets this morning. As you might expect, Financials, already under pressure due to their potential holding of risky sovereign paper, are hit harder than most.

They have proposed a higher degree of cooperation between Euro members, to ensure realistic budgets and debt boundaries are set and regularly monitored but that is not going to provide a quick fix, so ultimately will not help calm markets already selling on the back of their joint communique.

Still a long way to go now before the UK Governent can break even on it's holding of RBS and Lloyds shares, though a mere three months ago it looked a near term possibility.