When will the UK Guarantee Bank Deposits?
After Ireland, Germany & Denmark – when will the UK remove Business risk?
FTSE plunges 5% after weekend of financial turmoil
By Chris Marshall | 08:56:22 | 06 October 2008
Shares in London fell a precipitous 245 points – a near 5% fall – in early trading as investors absorbed the events of the weekend.
The falls echoed losses in stock markets across Asia and Europe. The German DAX was 4% off first thing on Monday, while the Paris CAC slumped almost 5%.
The declining stock prices were expected after a tumultuous weekend which saw Germany’s government agree a €50 billion (£38.7 billion) plan to bail out mortgage lender Hypo Real Estate.
The German government also said it would guarantee all private German bank accounts, as did the Danish government.
The Financial Times reported this morning that chancellor Alistair Darling is considering moving closer to an effective part-nationalisation of the banking sector by using more taxpayer cash to help the banks. More details on the government’s plans to take shareholdings in UK banks are expected from the first meeting of the prime minister’s Economic Crisis Council today.
In other developments over the weekend, French giant BNP Paribas confirmed it had agreed to buy 75% of Fortis’s operations in Belgium and Luxembourg.
Concerns were also growing over the weekend that the US bail-out plan – signed off on Friday – would not get the money quickly to those who need it, and not halt a global recession.
The banks led the FTSE’s decline early on, with HBOS the worst-hit, falling 42.5p at first, before gaining a little to 171p at 0820.
Originally posted 2008-10-06 09:42:50.
