Wednesday, October 01, 2008

Bank Bailouts underway in Europe

Monday's stock market plummet posted the first post-$1 trillion day ever, another ominous record set.

In Europe, Dutch-Belgian banking giant Fortis NV has been partially nationalized with a 11.2 billion euros ($16.4 billion) rescue from the governments of Belgium, the Netherlands and Luxembourg, after investor confidence in the bank disappeared. The Belgian government also announced morning a €6.4 billion ($9.2 billion) plan to rescue faltering bank Dexia, which ran up huge losses in its U.S. operations.

The British government nationalized mortgage lender Bradford & Bingley, taking over the bank's 50 billion pound ($91 billion) mortgage and loan books, the second bank nationalized by the British government. In a similar move, the Icelandic government bought a 75 percent stake in Glitnir, the country's third largest bank, for 600 million euros ($878 million). In Germany, the country's second biggest commercial property lender, Hypo Real Estate Holding AG, secured a multibillion euro line of credit from several banks.

The Irish government said it would guarantee all deposits in Irish banks following a massive drop in the value of Irish bank stocks.

Meanwhile, the Bank of Japan has pumped 20 trillion yen ($192.3 billion) into money markets, amid an effort among the world's central banks to calm worries about a global financial crisis.

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