"Germany guarantees all retail bank savings, as European governments take more individual stepsAFTER stepping in to save five banks in seven countries in the past week, Europe’s governments had hoped to stop fear spreading through the continent’s financial system. They failed. Authorities are again busily trying to keep afloat several of the banks they had previously bailed out. The biggest of the bank rescues to flounder was that of Hypo Real Estate, a mammoth German property lender and financier of local governments. Hypo was deeply reliant on money markets to fund its long-term loans. Yet these have frozen in recent weeks. Paradoxically, the source of its weakness—its reliance on money markets—also made it too interconnected to fail. German authorities muttered darkly of their economy and financial system suffering a ripple of unpredictable consequences similar to those caused by the collapse of Lehman Brothers in America in mid-September, had they let it go down. ..." (2008-10-6)
October 9, 2008
Europe's governments struggle to cope with more financial turmoil
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