Europe gets a fever:
European nations scrambled further Monday to prevent a growing credit crisis from bringing down major banks and alarming savers as Sweden followed Germany, Austria and Denmark in offering new protections for bank deposits.
As troubles in financial markets spread around the world, accelerating economic downturns in major economies on three continents, Sweden became the latest European country to offer new protection for bank deposits, after the German government offered blanket guarantees Sunday to all private savings accounts.
Austria and Denmark followed suit later Sunday after the German move, and expectations were high that Alistair Darling, the British chancellor of the Exchequer, would be forced to announce some new measures by the end of the day to calm the turmoil in the London market. Stocks fell sharply in London, Paris and Frankfurt on Monday.
New bailouts were arranged late Sunday for two European companies, Hypo Real Estate, a large German mortgage lender, and Fortis, a large banking and insurance company based in Belgium but active across much of the Continent. Under the agreement, BNP Paribas will acquire the Belgium and Luxembourg banking operations of Fortis for about $20 billion.
The spreading worries came days after the United States Congress approved a $700 billion bailout package that officials had hoped would calm financial markets globally.
United States regulators were themselves working to resolve a merger fight that could make investors more uneasy. Court hearings Sunday in New York sought to adjudicate competing efforts by Citigroup and Wells Fargo to acquire Wachovia, a large bank that nearly failed a week ago.
The crisis in Europe appears to be the most serious one to face the Continent since a common currency, the euro, was created in 1999. Jean Pisani-Ferry, director of the Bruegel research group in Brussels, said Europe confronted “our first real financial crisis, and it’s not just any crisis. It’s a big one.”
This isn’t over yet, folks.
October 6th, 2008 at 11:35 am
[...] the crisis spreads to Europe, Wall Street takes another dive: NEW YORK (CNNMoney.com) — Stocks tumbled Monday, with the [...]