Market News: The FTSE (.FTSE) has started the day in positive territory, however the banks could threaten to pull the index down as the day progresses.

Banks are weak as OFT chief executive expressed concern over the adverse impact on competition that could result giving the rescued banks a free hand to trade their way out of trouble.

By 9:45am Lloyds (LON:LLOY) is down massively to 74.00 representing a loss of 7.15%.

John Fingleton, chief executive of the Office of Fair Trading, said regulators must avoid a "two-tier system" developing between newly-created banking giants and new entrants.

Fingleton did not directly refer to Lloyds TSB's takeover of Britain's largest mortgage lender HBOS at the height of the banking crisis last September, which the government sanctioned without a competition inquiry.

But he said consumers would be the losers if the government failed to balance the need to save banks with efforts to promote competition.

RBS (LON:RBS) is down to 28.50 losing 1.30 or 4.36% on yesterday.

Other movers

BAE Systems (LON:BA) and Cobham are going well, suggesting it was not as bad as feared even though Robert Gates, US defence secretary, chopped several high-profile weapons programmes.

Gross profit fell 32% at recruitment firm Michael Page during the first quarter, hurt by a 39% slump in the UK as the impact of the financial crisis hit nearly all its markets.

Struggling sportswear retailer JJB Sports has proposed a compulsory voluntary agreement (CVA) with its landlords to ease its rental payments burden and settle amounts outstanding on closed shops. It has also agreed £50m of new bank facilities if the CVA is approved.

PartyGaming said the significant strengthening of the US dollar and competitive pressures in its core poker division were the primary factors behind the drop in quarterly revenues. Group revenues fell to $100.1m in the three month ended 31 March compared with $128.9m last time.

It has also signed a non-prosecution deal with the US authorities after agreeing to pay $105m.

Rio Tinto is to slow construction of the Yarwun alumina refinery expansion in Gladstone and cut annual bauxite production at its Weipa mine to 15m tonnes from 19.4m. The miner blamed the sharp fall in alumina and aluminium demand and prices in recent months.

AstraZeneca has filed a lawsuit in the US against Canadian firm Apotex in an attempt to try and stop it selling a generic version of Astra's Pulmicort Respules asthma medicine.

Plastics group Victrex saw first half sales volume drop 40% due to lower demand in the group’s Victrex PEEK unit.