World markets fell Friday, led by bank stocks after President Barack Obama proposed a sweeping overhaul of Wall Street to avert future financial crises. Obama said he would seek to limit the size and complexity of large financial institutions so that their collapse wouldn't imperil the broader financial system and world economy or cost taxpayer money in bailouts. The announcement spooked investors, causing a sell-off in North America, Europe and Asia. The Dow blue chip index plunged more than 200 points for a second straight day on Friday amid concerns over US President Barack Obama's bank revamp plans and doubts on Federal Reserve chief Ben Bernanke's renomination. The Dow Jones Industrial Average slumped 216.90 points (2.09 percent) in final trades to 10,172.98, posting its third straight triple digit loss. The Nasdaq composite tumbled 60.14 points (2.67 percent) to 2,205.29 and the Standard & Poor's 500 index dropped 24.72 points (2.21 percent) to a provisional close of 1,091.76. European shares fell on Friday to post their worst weekly fall in nearly three months, with financial stocks hit by US President Barack Obama's vague proposals to curb risk-taking at banks. The FTSEurofirst 300 index of leading European shares closed down 1.1 percent at 1,024.95 points, losing for the third consecutive session. The index lost 2.6 percent for the week, its worst weekly percentage fall in nearly three months and is down 2 percent this year. “It is all to do with the banks. The bottom line here is we have no idea how the banking plan is about to unfold, if indeed it does,” said Peter Dixon, economist at Commerzbank. “This is all at a time when markets are already fairly wobbly. The markets are always going to sell off when there is uncertainty. I think this is the story for today and will be for the next week.” Banks took the most points off the index after Obama unveiled tough new proposals on Thursday to limit risk-taking in the banking sector and restrict some of the banks' most lucrative operations. Credit Suisse, Barclays, UBS and Deutsche Bank fell 3.9 to 6.4 percent. Across Europe, the FTSE 100 index was down 0.6 percent, Germany's DAX fell 0.9 percent and France's CAC 40 was 1.1 percent lower. Energy stocks were under pressure as crude slipped 1.2 percent. BP, Royal Dutch Shell and Total lost 0.8 to 1.7 percent. The VDAX-NEW volatility index, a measure of investor risk appetite or aversion, was up 2.8 percent after earlier hitting a six-week high. The higher the volatility index, which is based on sell and buy options on Frankfurt's top-30 stocks, the lower is investors' appetite for risky assets such as cyclical stocks, and equities in general. In Asia, Japan led the drop, with the Nikkei 225 stock average diving 2.6 percent to 10,590.55. Hong Kong's Hang Seng dropped 0.7 percent to 20,726.18 and Korea's main market index lost 2.2 percent to 1,684.35. Elsewhere, China's Shanghai benchmark fell 1 percent, India's Sensex shed 1 percent and Australian stocks retreated 1.6 percent. While banks in the US fell steeply, shares in Asian financial institutions performed better, with many closing the session higher. Crude oil prices fell Friday. New York's main contract, light sweet crude for March delivery, slid $1.54 to close at $74.54 a barrel. In London, Brent North Sea crude for delivery in March shed $1.75 to settle at $72.83 a barrel.
