Oh, and By the Way… Europe’s Hurting Too

From the BBC:

The country’s second-biggest commercial property lender, Hypo Real Estate, was threatened with collapse last week after incurring large amounts of bad debt.
The government attempted a bail-out, only for it to collapse on Sunday after a banking consortium withdrew support for the deal. A new bail-out was arranged with guarantees of 50bn euros ($68bn; £38.7bn), 15bn euros more than the first rescue attempt.
The German government has also announced what appear to be unlimited guarantees for private savings. However, it said there would be no legislation to give extra protection to savers.
Chancellor Angela Merkel said those financiers who did “irresponsible business” would be made accountable.

Iceland’s government has drafted emergency legislation giving it wide-ranging powers to dictate banks’ operations.
Prime Minister Geir Haarde said the legislation would help the island avoid national bankruptcy.
Iceland will also offer an unlimited guarantee for all savings accounts.
The Icelandic krona plummeted against the dollar after the government nationalised the country’s third-largest bank, Glitnir, last week. By Friday it had lost one-fifth of its value.
The government has agreed measures allowing the banks to sell off some foreign assets to help shore up the financial system.

The country’s largest banking group, Fortis, has been in difficulty since it joined two other banks to purchase the Dutch bank ABN Amro, just before the global financial crisis began.
After several failed bail-out attempts, French giant BNP Paribas agreed to buy 75% of Fortis’s operations in Belgium and Luxembourg. The two governments will take a minority share of the company, while its Netherlands operation has been nationalised.

Ireland was the first government to come to the rescue of its citizens’ savings, promising on 30 September to guarantee all deposits, bonds and debts in its six main banks for two years.
The move initially prompted consternation among some European partners, but several countries have since followed suit.

Chancellor Alistair Darling vowed on Monday to do “whatever is needed” to ensure financial stability. He said all practical options remained open, but he stopped short of guaranteeing all bank savings.
He also said European countries must work closely together to tackle the problems facing the world’s financial system.
The UK government will increase its guarantee to savers from £35,000 ($62,000) to £50,000 from Tuesday.
The Treasury is said to be considering buying large stakes in Britain’s banks to encourage lending. The Northern Rock bank and the mortgage lender Bradford & Bingley have already been nationalised, and two other large groups, HBOS and Lloyds TSB, are to merge.

The Greek government said on Friday it would fully guarantee all bank deposits of citizens, but an official added that this was a “political commitment” and the banking system was not at risk.

The Danish government and banks on Sunday agreed a crisis plan which removes the ceiling on savings deposit guarantees, to be funded partly by banks and partly by the taxpayer.

So, while everybody is worrying about our economy is going to recover from the credit mega-uber-super-duper crisis, we seem to have forgotten that our allies are getting destroyed as well due to our mismanagement of the markets from top to bottom.

Hey Paulson, can we bail the Europeans out too?

  1. They have already given Barklays billions. Llyods will be next.

    When the US markets sneezes the rest of them catch a cold. Now is a time to break up the monopoly of the NYSE but that won’t happen for another 2 years.

  2. thebeadden

    Just think, in the end, we will be left with what? 3 or four big banks running the show. This is a big opportunity to crush small business. Make room for the big boys, they are going to buy everything up.

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