STOCKS NEWS EUROPE-UK banks slip after stern govt report on sector

Shares in Britain's "Big Four" banks - Barclays, HSBC andpart-nationalised lenders Royal Bank of Scotland and Lloyds -slip after a UK parliamentary report warns the sector may need tougherregulation following the global financial crisis. Barclays falls 2.3 percent, among the main losers on the benchmark FTSE 100index, which is down by 0.9 percent. HSBC drops 0.9 percent, RBS is down1.5 percent while Lloyds falls 1.6 percent. Standard Chartered, which conducts most of its business overseasbut has headquarters in London, slips 1.1 percent. The Parliamentary Commission on Banking Standards says on Friday that Britain needs to introduce legislation that could break up banks if standardsslipped because current reform proposals fall short of what is needed. "It just adds a bit more negative sentiment towards the sector," saysSecurequity sales trader Jawaid Afsar. Espirito Santo analyst Shailesh Raikundia writes that although much of thereport's proposals have already been factored in by investors, it neverthelessadds to a wave of ongoing public criticism about the industry, which has beenhit by a wave of scandals such as alleged rigging of the Libor interest-rates. "Overall much of the substance of today's report is widely predicted, but iscritical of banks' ethical standards," writes Raikundia. Reuters messaging rm://sudip.kargupta.thomsonreuters.com@reuters.net