US President Barack Obama: "I am proposing simple, common sense reforms"
US stock markets have tumbled for a second consecutive day, on concern over President Obama's plan to revamp the US banking industry.
The Dow Jones plunged by 216 points, or 2%, to close at 10172.98, while the technology heavy Nasdaq fell by 2.6%, or 60 points, to finish at 2205.29.
The broader S&P 500 Index also sank by more than 2% to end at 1091.76.
Financial shares in both the US and Europe led the fall. Barclays dropped by 4%, while JPMorgan fell 3.4%.
Mr Obama - who said he was "ready for a fight" with banks - plans to limit their size and restrict risky trading.
"Never again will the American taxpayer be held hostage by banks that are too big to fail," Mr Obama said.
Meanwhile, Japan's Nikkei also closed at a three-week low.
Politicians in the UK were quick to sign up to Mr Obama's proposals.
The Treasury said it would consider the US bank reform plans "very carefully," while City Minister Lord Myners said the US proposals were "very much in accordance with the direction we have been setting".
The government has recently focused mainly on tackling bankers' large bonuses - a source of public outcry - with a one-off "super-tax" and other measures.
Meanwhile, the Financial Services Bill is making its way through Parliament, aiming to give the Financial Services Authority more powers to regulate banking behaviour.
It would also force banks to hold more money in reserve, as well as creating a new Council for Financial Stability, which is intended to consist of Treasury, Bank of England and FSA officials.
But none of the planned legislation goes as far as what the US president has now proposed.
'Profound fear'
Shadow chancellor George Osborne said that the Conservatives would impose an identical dismantling of UK banks to what Mr Obama proposed if elected.
But he said he would want to see international agreement before implementing any change in the UK.
BBC business editor Robert Peston said Mr Osborne's comments would "generate profound fear in the boardrooms of Barclays and Royal Bank of Scotland".
"Banking reforms do not come bigger than those proposed by President Obama," he added.
Other nations also backed the proposals. "I think this is a very, very good step forward," said French Finance Minister Christine Lagarde.
Limiting risk taking
"While the financial system is far stronger today than it was one year ago, it is still operating under the exact same rules that led to its near collapse," Mr Obama said.
His proposals may mean that some of the biggest US banks have to be broken up.
What this means for foreign banks working in the US is still unclear.
They also include a ban on retail banks using their own money in investments - known as proprietary trading. Instead, banks would be limited to investing their customers' funds.
The moves follow popular anger at financial institutions, who have been paying large bonuses to staff even as they accepted government bail-outs to keep them going.
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