The global financial markets followed Wall Street's decline on Friday and continued to drop amid global fears for a double-dip recession.
At opening, Britain's FTSE 100 dropped more than 3.4% on Friday. The drop was sharper than expected even after the dramatic 500 point drop on Wall Street the day before.
The FTSE 100 is on track for triple-digit close for the third consecutive day. The last time FTSE saw such consecutive dives was in 2008 at the height of the banking crisis.
According to analysts, FTSE is set for one of the worst weeks in its history.
British banks are also being pounded by market looses. The Royal Bank of Scotland and the Lloyds Banking Group were both down 10 percent as was Barclays which fell harder than the other two first thing Friday morning.
Nervous investors across the world are dumping stocks left and right amid fears that another deeper global recession is imminent.
The driver of these fears is widespread uncertainty over the strength of the U.S. economy and concern that the European debt crisis is spiraling out of control, and that the European governments will be unable to contain it.
Bond yields in both Italy and Spain remain above critical 6 percent levels. The two countries are Europe's third and fourth largest economies and their yields are at 6.3 and 6.4 percent.
Levels above 7% forced Greece and Portugal to seek bailouts from the EU and IMF.
Former Italian prime minister blamed power politics in Europe for the crisis arguing to the BBC, "We don't know who is in charge."
Even Asian markets felt the wrath of market fears and followed the dramatic Wall Street drop recording sharp declines with Australia’s All Ordinaries falling 4.3 percent, Japan’s Nikkei dropping 3.5 percent, and South Korea’s Kosp dipping 3.6 percent.
Crisis talks are being held by French President Nicolas Sarkozy and German Chancellor Angela Merkel today. Sarkozy will also be speaking with Spain's Jose Luis Rodriquez Zapatero.
Today's drop comes on the heels of the Dow Jones Industrial Average closing yesterday at its ninth drop in ten days and losing 4.31 percent of its value.