European shares fell on Friday and ended a four-day winning streak after signs of disagreement from European Union (EU) leaders over how to help the region's debt-ridden banks hit financial stocks.
Major European Indexes
The STOXX Europe 600 Banking index was the worst-performing sector, falling 2.4 percent after Germany toughened its stance on using the region's bailout funds to directly recapitalize struggling banks.
That impacted the sector and saw Spanish banks hit hard, with Bankia down 14 percent and Banco Popular down 5.3 percent. A fall in leading lender Santander also took the most points off a 2.3 percent weaker IBEX.
Across Europe, the broader FTSEurofirst 300 index provisionally closed down 0.8 percent at 1,111.30 points, while the Euro STOXX 50 index of leading euro zone blue chips fell 1.5 percent to 2,536.86 points.
Luc Bocahut, a portfolio manager at Monaco-based firm Tiverton Trading, felt European equities were prone to a bigger fall-back, due to a general lack of progress in finding long-lasting solutions to the euro zone debt crisis.
"I would be quite bearish here. They really haven't made much progress," he said.
On Thursday, German Chancellor Angela Merkel said that a single banking supervisor would have to be completed before any rescue funds from the European Stability Mechanism (ESM) could be used to recapitalize troubled banks. At the EU summit it was agreed a legal framework is to be set up by the end of the year, quicker than many hoped.