The Greek government decided on Sunday night it had no option but to close the nation’s banks the following day after the European Central Bank (ECB) raised the stakes by freezing the liquidity lifeline that has kept them afloat during a six-month run on deposits.
In London the FTSE 100 tumbled by 150 points - more than 2% - when trading began at 8am BST. There were even sharper falls across Europe, with the French and German markets both tumbling by 4%. European banking shares were the hardest hit, suffering losses of up to 10%.
Live Greece debt crisis: markets slide after capital controls imposed - live Turmoil hits the financial world as Greek banks are shut for a week, triggering a new phase of the eurozone crisis
Read more Overnight in Tokyo the Nikkei index had fallen almost 3% and in Hong Kong shares slid 2.5%.
“The Greek butterfly looks set to cause a tornado in financial markets,” said Michael Hewson, chief markets analyst at CMC Markets UK. “In the process we could well also find out if this event turns out to be the equivalent of the butterfly flapping its wings in New Mexico, going on to cause a hurricane in China.”
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