Global financial markets were down today, pulled lower due to banking woes in Europe and ongoing allegations of LIBOR market rigging.

The benchmark Stoxx 600 index dropped 0.5% to 244.67, and the U.K.’s FTSE 100 ended down 0.6% at 5493.06. Barclays (NYSE: BCS) led the decline, falling over 15% after announcing a settlement of £290 million ($454 million) to settle a probe by U.S. and U.K. regulators into claims the bank had manipulated the interbank lending rates. There was pressure Thursday for Barclays’ Chief Executive Bob Diamond to resign. Politicians in the U.K. warned Mr. Diamond that he would have to testify in front of a Treasury Select Committee and that the U.K. regulator’s investigation was ongoing. The fall in Barclays stock was its largest one day percentage decline in over three years. The stock reached it’s limit down during the session, automatically suspending trading until market makers could verify the fall was for real. Unfortunately, it was, and trading resumed.

Other banks slumped on concerns of their possible implication in the scandal. Royal Bank of Scotland finished down 12%, Lloyds BankingGroup (NYSE: LLOY), and HSBC (NYSE: HBC) dropped 4%, and 3% respectively. Deutsche Bank (NYSE: DBK) sank 5%.

Mike Lenhoff, chief strategist at Brewin Dolphin commented “There’s a feeling there’ll be limited progress toward stemming the crisis and that’s what has been occupying the markets. It sounds like [the European leaders] will be focusing more on longer-term building blocks for firmer fiscal integration and banking supervision, but markets don’t have the foresight to look ten years ahead and they want something right now.”

Germany’s DAX fell 1.3% to 6149.91 and France’s CAC-40 ended 0.4% lower at 3051.68. Investors were also waiting for details from the European Union summit in Brussels, where leaders are discussing fiscal integration and the co-ordination of banking systems. The tumultuous week will likely continue, as no end appears in sight for European sovereign debt, and a brewing banking crisis threatens to undermine the world’s recover. Comments by a German finance minister appealing to EU members to use a bailout fund to purchase government debt helped boost sentiment somewhat in Italy and Spain. However, until a more holistic solution is reached, volatility will likely continue.