FTSE 100 banks unnerved by rules call Banking stocks were lower across the board in London on Monday amid calls from UK lawmakers for tougher rules to govern the sector. The Parliamentary Commission on Banking Standards published a report calling elements of the government's proposed banking legislation "extremely weak" and which must be urgently toughened. The commission highlights a particular concern with the banking reform bill's position on "leverage" - a crucial measure restricting a bank's size relative to its equity capital - which it says is "almost certainly too low." With the bill due for its second reading in the House of Commons, any changes made to it reflecting the criticism could leave UK banks facing tougher leverage ratios than their global rivals. "Granted the banks do seem to be coming under some additional pressure now and there's that move to split RBS but to think this is the start of a bigger sell-off for the sector would seem overdone," said Mike McCudden, head of derivatives at Interactive Investor. This legislative move isn't a surprise, so the real downside is already priced in. Royal Bank of Scotland fell 2.5 per cent to 298.6p. Lloyds Banking Group fell 1.7 per cent to 49.2p. Barclays was 2.5 per cent weaker at 310.1p and HSBC fell 0.8 per cent to 731.5p. Accountancy software writer Sage Group was the biggest faller, down 4.3 per cent at 334.4p after a broker downgrade. Bank of America Merrill Lynch cut its rating on the stock from "neutral" to "underperform." Overall, the FTSE 100 held steady, with demand for defensive stocks cancelling out the losses in the financial sector. London's main benchmark index was 0.1 per cent weaker overall at 6,477.19, a loss of 6 points, but near its best levels since January 2008. Craig Erlam, market analyst at Alpari, said: "Investors are still focusing on the strong employment figures out of the US on Friday. The non-farm payrolls figure smashed even the most optimistic of forecasts, while unemployment fell by 0.2 per cent, the clearest sign yet that businesses have not been discouraged by the political issues in Washington and higher taxes for consumers. But London traders were on the lookout for protection for their recent gains. United Utilities added 1.2 per cent at 720p. Brewer SABMiller was the best single riser, up 1.8 per cent higher at £34.64. Broker RBC increased its price target on the stock from £28.00 to £35.00.