IMPEACH BUSH

LONDON (AFP) - European stock exchanges suffered sharp falls Friday on fresh fears for the health of the banking sector sparked by a report from Goldman Sachs.

The US investment bank said in a note it had lowered its 2008-2010 forecasts for more than 40 European banks, warning that some of them may have to raise between 60 and 90 billion euros (94-141 billion dollars) to shore up finances in the face of a nearly year-long credit crisis.

In London the FTSE 100 shed 1.16 percent to close at 5,412.80 points, while in Paris the CAC 40 fell 1.80 percent to 4,266. The Frankfurt Dax lost 1.28 percent to finish at 6,272.21.

The Euro Stoxx 50 index of leading eurozone companies closed 1.67 percent in negative territory at 3,275.20.

Wall Street was closed for the Independence Day holiday.

In London banks were also hurt by news that TPG, a US investment fund, had decided against taking a stake in Bradford and Bingley after Moody's lowered its recommendation on the British bank.

Bradford and Bingley fell 18.03 percent to 50 pence while Barclays lost 4.45 percent to end the day at 279 pence.

Elsewhere mining giant BHP Billiton added 0.80 percent to reach 1,763 pence after announcing a steep rise in prices for iron ore that it supplies to Baosteel of China.

In Paris, analyst Yves Marcais of Global Equities said his group "believes that a correction in the banking sector is far from over."

In addition, he said, investors remain uncertain about prospects for oil prices "as we approach the cyclone season in the United States and fears grow of a US attack on Iran."

Among French banks, BNP Paribas fell 2.79 percent to 57.04 euros, Credit Agricole lost 2.50 percent to finish at 12.89 euros and Societe Generale shed 2.51 percent to reach 54.81 euros.

Air France-KLM failed to take advantage of a dip in oil prices and fell 1.74 percent to 14.15 euros after it said it would reduce capacity this winter in the face of high fuel costs.

Electricity provider EDF gained 0.45 percent to finish at 58.09 euros on an announcement that France will build a second third-generation EPR nuclear plant.

In Frankfurt chipmaker Infineon shot up 1.95 percent to 4.71 euros on reports of a possible takeover bid.

Elsewhere in Europe there were losses of 2.3 percent to 3,016.44 on the Bel-20 in Brussels, 1.04 percent to 6,772.4 on the Swiss Market Index, 1.79 percent to 11,765.90 on the Ibex-35 in Madrid, 0.64 percent to 28,908 on the SP/Mib in Milan and 1.27 percent to 403.36 on the AEX in Amsterdam.