WASHINGTON, Nov 4, 2007 (AFP) - International banks were left reeling Monday after the resignation of Citigroup chief Charles Prince, the second major US banker to quit in a week over massive losses in the subprime mortgage crisis.

While new Citigroup chairman Robert Rubin announced measures to boost accounting at the world's biggest bank, fears that more banks will have to confess to major losses hit Asian and European institutions as stock markets reopened.

British banks Barclays and Royal Bank of Scotland saw their stock shed about 3.0 percent in value. In Tokyo, Mitsubishi UFJ Financial, Sumitomo Financial and Mizuho Financial fell by a similar amount.

"Concerns about European bank exposure to the subprime market have resurfaced after last week's announcements from US banks," said Isabelle Delattre, fund manager at Raymond James Asset Management.

"The full truth (on banks' subprime exposure) has yet to be fully uncovered."

Prince followed Merrill Lynch's chief Stanley O'Neal in quitting after their banks reported massive losses from dealing in low grade mortgage loans.

"It is my judgment that given the size of the recent losses in our mortgage-backed securities business, the only honorable course for me to take as chief executive officer is to step down," Prince said in a statement.

The company announced losses of up to 11 billion dollars -- massively higher than the 2.2 billion it had reported for the third quarter in September.

"Citi estimates that, at the present time, the reduction in revenues attributable to these (sub-prime related) declines ranges from approximately eight billion to 11 billion dollars," it said in a separate statement.

Rubin, the influential chairman of the company's executive committee, was named the new overall chairman, while Sir Win Bischoff, chairman of Citi Europe, will become interim chief executive.

As US Treasury Secretary, Rubin, 69, earned a strong record by helping weather the Mexican financial crisis in 1995 and the Asian crash of 1997.

He was an influential adviser to President Bill Clinton.

Merrill Lynch reported eight billion dollars of losses last month and O'Neal left his post last week.

A host of major banks has been hit by losses from exposure to mortgage-backed securities, which have been ravaged by the US housing downturn.

Citigroup had already revealed losses from bets it made on mortgage-backed securities and other loan instruments, as well as disclosing hefty pre-tax writedowns related to mergers and acquisitions lending agreements.

The banking giant's stock closed down 2.0 percent at 37.73 dollars Friday. Its shares have slumped 21 percent from 47.72 dollars on October 1 prior to the release of its latest earnings. The price has fallen 32 percent this year.

The Wall Street Journal said the Security and Exchange Commission would launch a preliminary investigation into Citigroup's accounting practices.

On finding a permanent replacement for Prince, Rubin said: "We intend to complete our search for a new CEO as expeditiously as possible, reviewing qualified CEO candidates from outside as well as within our organization.

"In addition, a new unit, the sole focus of which will be on managing the assets related to sub-prime mortgage securities and their resultant exposures, has been established," Rubin added, referring to the high-risk mortgages that are offered to home buyers with bad credit ratings.

"This unit will be separate from the other parts of our capital markets and banking business," Rubin said.

"I intend to work closely with the Board, Win, and the operating and executive leadership to maintain the momentum of our business," he added.

Rubin joined Citigroup in 1999 and came to be regarded as Prince's closest adviser.

"We will continue to focus on taking the steps necessary to help our employees realize their full potential, serve our customers with distinction, and build superior value for all of our shareholders."

Prince, according to The Wall Street Journal and The New York Times, left Citigroup with a payoff of between 31 and 94 million dollars.