Banking shares have been hit a wide array of rumours this morning, almost all of which appear not to be true. There has been speculation that Lloyds TSB, HBOS and RBS are all facing funding difficulties. HBOS is currently down 11pc, with RBS down 5pc amd A&L down 4pc.

Traders at one leading investment bank are suggesting that this speculation is little short of “market manipulation” as short-sellers try to drive the banking stocks down in order to make more money.

The Bank of England has felt obliged to come out and say that no-one took emergency funding yesterday.

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Here’s what the above-mentioned traders have to say in full:

HBOS and Lloyds are getting toasted on rumours that they are facing liquidity problems (originally coming out of Asia). This looks like market manipulation.