Open

Coming up

Don't miss

Replay


LATEST SHOWS

IN THE PAPERS

'iVIOLATED'

Read more

BUSINESS DAILY

France's Iliad considers fresh offer for T-Mobile

Read more

IN THE PAPERS

Back to school!

Read more

WEB NEWS

USA: Thousands pay tribute to Michael Brown

Read more

MEDIAWATCH

Is Carla Bruni against a political comeback for Sarkozy?

Read more

DEBATE

Pakistan Protests: Democracy put to the test (part 2)

Read more

DEBATE

Pakistan Protests: Democracy put to the test

Read more

ENCORE!

The French Maestro of Soul

Read more

FOCUS

US tobacco giants want lion's share of e-cigarette business

Read more

  • NATO plans new 'spearhead' force to counter Russia

    Read more

  • Arab media strike back at IS Islamists – with cartoons

    Read more

  • US military targets Somalia's al Shabaab Islamist group

    Read more

  • Monaco’s Falcao leaves Ligue 1 for Man Utd

    Read more

  • UN backs Iraqi request for inquiry into IS militant crimes

    Read more

  • French education ministry picture sparks racist abuse

    Read more

  • Obama calls for higher wages amid 'revving' US economy

    Read more

  • Video: Ukraine’s children return to school as fighting rages on

    Read more

  • Americans detained in North Korea call for US help

    Read more

  • US urges Israel to reverse West Bank land seizure

    Read more

  • Lesotho PM calls for regional peacekeeping force after ‘coup’

    Read more

  • Ukrainian forces retreat from Luhansk airport after clashes

    Read more

  • Teddy Riner, France’s unstoppable judo champion

    Read more

  • Death toll rises in Paris apartment building blast

    Read more

  • Iraqi forces free Amerli in biggest victory over IS militants since June

    Read more

  • Anti-govt protesters briefly seize Pakistan's state TV

    Read more

  • French police arrest hungry hedgehog hunters

    Read more

European stocks rise after Asian surge

Latest update : 2008-10-13

European stock markets rose massively in early deals on Monday, with London, Frankfurt and Paris each up more than five percent.

Watch our interview with the president of the World Bank, Robert Zoellick.

 
LONDON/KUALA LUMPUR - Governments across the world moved
on Monday to shore up confidence in the global banking system with
a slew of bank bailouts worth hundreds of billions of dollars.
 

Stocks markets reacted positively, with European shares
opening up more than 4.5 percent following solid gains in Asia,
 

Britain said it would spend up to 37 billion pounds ($63.95
billion) buying into top UK banks. The move will likely  see the
UK government becoming the biggest shareholder in Royal Bank of
Scotland and lender HBOS.
 

The French government will also create a 40 billion euro
($54.89 billion) fund to take stakes in banks, Dow Jones
newswires said on Monday, citing a source.
 

France's finance ministry had no comment on the report but
said a news conference was planned later in the day.
 

Germany and Italy were expected to make similar moves. The
German bank rescue plan alone could be worth up to 400 billion
euros, according to media reports, and is being fast-tracked
through the parliament in Berlin.
 

Euro zone leaders held an emergency meeting on Sunday and  
hurried out plans to help banks through the worst financial
crisis since the 1930s.
 

French President Nicolas Sarkozy said people could expect a
flurry of coordinated announcements of financial details from
national capitals across Europe, notably Paris, Berlin and Rome
on Monday afternoon.
 

In tandem on Monday, European central banks said they would
lend out as much U.S. dollar liquidity as commercial banks need
for in a further joint bid to tame money market tensions.
 

In a joint announcement with the U.S. Federal Reserve, the
European Central Bank, the Bank of England and the Swiss
National Bank said they would meet all bids from commercial
banks at a fixed interest rate.
 

Australia and New Zealand earlier also guaranteed all bank
deposits and Indonesia upped its guarantee to 2 billion rupiah
($203,000) while India pledged more liquidity to help financial
markets.
 

The moves followed a weekend of crisis talks in the United
States and Europe in which governments pledged to support the
financial system, which has moved to the brink of collapse as it
suffers from both steep losses in the credit market and a lack
of trust in lending that has frozen the flow of capital.
 

The crisis has swept across financial markets, sending many
stock markets into free fall. MSCI's main world stocks index,
for example, has lost a quarter of its value since the beginning
of October.
 

Investors appeared to be comforted by the government
bailouts.
 

The pan-European FTSEurofirst was up 4.6 percent and Asian
shares outside of Japan, whoch was closed for a holiday, gained
5 percent.
 

"We are arguably now near the end point in terms of the
extremely violent sell off in equities and widening in spreads,
said Sean Maloney, a bond strategist at Nomura.
 

But he added: "The recovery process is likely to be very
long winded and will likely take about as long as the crisis has
taken thus far."
 


 

"MASSIVE" ASSAULT
 

What world leaders have been trying to avoid is a repeat of
the situation where the likes of Lehman Brothers were allowed to
go bust.
 

The head of the IMF said the worst of the financial crisis
was possibly over, and the Fund would draw lessons from the
crisis to make proposals to reform the international financial
system.
 

IMF Managing Director Dominique Strauss-Kahn said individual
states should intervene when necessary according to their own
specific needs, but it was important that any intervention
should be "massive".
 

Underlining this, three major British banks could take 37
billion pounds in government money to boost their capital, the
UK Treasury said.
 

Royal Bank of Scotland said in a statement it will boost its
capital by 20 billion pounds, including the UK government taking
5 billion pounds in preference shares and 15 billion pounds
underwritten by the government.    HBOS and Lloyds TSB will also
participate in the government scheme "upon successful merger",
the Treasury said in a statement.
 

Barclays said in a separate statement it would boost its
capital by more than 6.5 billion pounds but expected to do so
without government help.
 

"It's necessary because we are going through quite
extraordinary circumstances the world over and I'm determined to
do everything we can to stabilise our banking system and make it
stronger," British finance minister Alistair Darling said.

Date created : 2008-10-13

COMMENT(S)