Greece debt crisis: Global stock markets slide
tock markets in Europe and the US have fallen after Greece closed its banks and restricted cash withdrawals.
The moves by the Greek authorities came after the European Central Bank decided not to extend emergency funding.
London's FTSE 100 index closed down 1.97% and Germany's Dax index fell more than 3.5%. In the US, the Dow Jones closed 1.95% lower.
Bank stocks were among the hardest hit, with Commerzbank and Deutsche Bank losing 4.8% and 5.8% respectively.
Speaking after the London market had closed, chancellor George Osborne said that British banks had "dramatically less" exposure to Greece than in 2012.
"I think they are well prepared for whatever eventualities unfold," he told the House of Commons.
Mr Osborne also warned that the Greek crisis was "one of the biggest external economic risks to the British economy".
"I don't think anyone should underestimate the impact a Greek exit from the euro would have on the European economy and the knock on effects on us," he added.
The Athens Stock Exchange and Greek banks are closed all week.
On the money markets, the euro lost ground against other major global currencies.
Meanwhile, political developments have continued, with the European Commission chief, Jean-Claude Juncker, saying he feels "betrayed" by the "egotism" shown by Greece in the failed debt talks.
London's FTSE 100 share index fell 133.22 points to 6,620.48 with other European markets seeing even bigger falls. Earlier in Asia, Japan's Nikkei index fell nearly 3%.
On the currency markets, the euro saw volatile trading in Asia, falling by 2% at one point. However, it later recovered some ground, with the euro down 0.12% against the dollar at $1.1179.
The euro weakened against the pound, with one euro now worth £0.7090, while the pound buys €1.4108.
Oil prices headed lower. Brent crude oil futures fell 1.3% to $61.96 a barrel.
Bond yields (an indication of borrowing costs) for Italy, Spain and Portugal - which are considered some of the weaker eurozone economies - rose.
In contrast, German bond yields fell. German bonds are seen as safer investments in times of crisi
'Out of control'
Greece is due to make a €1.6bn payment to the IMF on Tuesday - the same day that its current bailout expires.
Last week, talks between Greece and the eurozone countries over bailout terms ended without an agreement, and Prime Minister Alexis Tsipras then called for a referendum on the issue to be held on 5 July.
At the weekend, the Greek government confirmed that banks would be closed all week, and imposed capital controls, limiting bank withdrawals to €60 (£42) a day.
"Greece's decision to shut banks over the weekend is just the most dramatic element of a crisis that has spiralled out of control," said Chris Beauchamp, senior market analyst at IG.