Monday, 29 September 2008

It's raining bailouts

The US government may be about to bail out Wall Street but there's more trouble on the other side of the Atlantic. Reuters reports:

A swathe of bank rescue deals took shape around Europe on Monday and fear gripped financial markets before a U.S. lawmaker vote to push through a $700 billion fund to deal with toxic debt...

The governments of Belgium, the Netherlands and Luxembourg moved to part-nationalize Belgian-Dutch group Fortis with an injection of over $16 billion.

British mortgage lender Bradford & Bingley was brought under the government's wing. Shares in French bank Dexia tumbled on a report it might need emergency capital, and bank rescue deals emerged in Iceland, Russia and Denmark too.

U.S. stock futures pointed to a drop at the opening bell on Wall Street, and Europe's FTSEurofirst fell more than 3 percent with bank stocks among the heaviest fallers...

The dollar climbed, mainly due to the euro and pound sliding about 1 percent, as the toll on financial firms spread in Europe and stirred expectations that central banks may have to respond by cutting interest rates.

Money markets remained frozen with banks refusing to lend to each other for all but the shortest periods.

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