Monday, October 06, 2008

Euro Notes: Hang Onto Your (Monetary) Euro Notes

Euroland is feeling the chill. Bank bailouts are in progress, and now different nations are scrambling to shore up their shaky finances:
Sweden became the latest European country to offer protection for bank deposits, after the German government offered blanket guarantees Sunday to all private savings accounts. Austria and Denmark also did the same.

Britain’s government on Monday scrambled to find ways to help the country’s ailing banking sector and even considered a part-nationalization of the industry. Chancellor of the Exchequer Alistair Darling on Monday continued to consult with advisers on ways to stabilize the banking sector, which may include a recapitalization financed by taxpayers, said a person at the Treasury who declined to be identified because the discussions are private.

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.

Well, it looks like another addition to the Financial Apocalypse soundtrack is due.

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