Barclays slumped on the London market amid speculation of a multibillion-pound share sale to appease regulators over its financial strength.
The bank closed down 3.5%, dragging down other lenders and holding back gains on the FTSE 100 Index.
The top tier was up just 5.5 points, at 6560.3, ahead of Barclays' announcement tomorrow on how it will plug a hole in its balance sheet.
Barclays is expected to issue new shares worth around £4 billion. It could also make further hefty provisions to cover mis-selling of payment protection insurance, interest rate swaps and identity fraud cover.
The Bank of England is forcing Barclays to raise fresh funds as a buffer against future financial crises, with a huge share issue likely to dilute investors. Its shares were down 11.1p to 309.05p.
A downbeat session for banks also saw Royal Bank of Scotland retreat 2.4p to 325.6p, HSBC dip 2.8p to 728.4p and Standard Chartered fall 16.5p to 1485.5p.
That held back wider optimism over central bank announcements later this week and expectations that stimulus measures will be kept in place.
In the case of the Bank of England, which is holding its second rates meeting under the helm of new governor Mark Carney, policymakers are likely to hold off in favour of the possible use of "forward guidance" later in the month.
The US Federal Reserve is not expected to change its policy tomorrow, although many analysts think September could signal the start of plans to taper its money stimulus programme.
Miners benefited from the solid economic sentiment to top the FTSE 100 leaderboard, with Randgold Resources rising 176p to 4839p and Fresnillo advancing 25p to 1051p.
On the currency markets, the pound dipped slightly against the dollar to 1.53 but held ground against the euro at 1.16.
In other corporate news,an advertising mega-merger failed to provide a lasting boost to Sir Martin Sorrell's WPP.
Analysts speculated the merger of Omnicom and Publicis, which will bring together agencies including Britain's Saatchi & Saatchi and BBDO, could allow others to pick up major accounts as firms choose to quit the new giant over potential conflicts.
But after initially soaring almost 5%, shares in the advertising group closed up just 7p or 0.6% at 1182p.
Nurofen and Strepsils firm Reckitt Benckiser fell 38p to 4588p, despite raising its full-year sales forecasts to the upper end of its previous 5% to 6% growth guidance.
The biggest risers on the FTSE 100 were Randgold Resources, Fresnillo, Shire up 55p to 2382p and Eurasian Natural Resources 4.9p firmer to 219.8p
The biggest fallers were Barclays, Intertek 86p lower to 2977p, Schroders 49p weaker to 2445p and Aggreko down 28p to 1750p.
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