Monday, September 29, 2008

European banks now falling

Overnight European governments stepped in to rescue Bradford & Bingley Plc, biggest lender to landlords, while governments in Belgium, the Netherlands and Luxembourg threw an 11.2 billion-euro ($16.3 billion) lifeline to Fortis. Germany guaranteed a loan to Hypo.

Countries in the Eurozone, such as Germany, are particularly at risk because they are no longer currency issuers and therefore will have to borrow in capital markets if continued bailouts are necessary. This will increase their deficits above the mandated limits set by the Eurozone Treaty.

Icelanding crown falls to six-year low againt the USD amid increasing turmoil.

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