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According to Reuters, the index had slid to 841.74 points at 12:22 BST, with banks leading the decline.
BNP Paribas, Credit Suisse, UBS and HSBC all fell by between 5.5 and 7.9 per cent, while Barclays and the Royal Bank of Scotland also slumped on the FTSE 100.
Land Securities Group was the biggest faller on the UK blue chip index, with share prices shedding over ten per cent to sit at 480p at 13:00 BST.
The market as a whole was down 1.25 per cent to 4,370.07 points and market strategist Joshua Raymond noted that trading continues to "lack direction".
Many investors are waiting for the release of US retail sales data before making their next move, he stated, adding that the stock markets "are at a bit of a juncture at the moment" and the publication of this information will "help dictate the next wave".
