Dollar gains as European banks falter

Dollar gains as European banks falter

money.cnn.com

The dollar's strength comes as the crisis on Wall Street appears to be spreading to the European financial system

(visit the link for the full news article)



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Mod Edit: Title fixed to reflect original article
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[edit on 5/10/2008 by Badge01]

Europe's also reeling under the American crisis.

Germany, England, and the BeNeLux all pumped billions into large banks.

The Belgian Prime Minister even went so far as to guarantee bank accounts.. if the bank would fail Belgium would pay all duped persons..

And now the Belgian gov also will inject another bank, Dexia, with goverment funds.

funds it claimed just weeks ago it did not have, when people demanded the goverment fund social programs to alleviate the worst hit by the global market woes..

All this has been passed without any prior knowledge of anybody in the Belgian public, except for the bankers and the goverment.

We just had to read it in the paper as a done deal.. no 'bail-out bill', just a bail out and a big FU finger pointed in our face..

money.cnn.com
(visit the link for the full news article)

just adding some more links, because the situation changed again..

this was under a week ago:

news.bbc.co.uk...

After all-night talks the Belgian, French and Luxembourg governments said they would put in 6.4bn euros ($9bn; £5bn) to keep it afloat. ... This latest move by European governments to shore up another bank under pressure came as global stock markets plunged after the US House of Representatives rejected the White House's planned $700bn bail-out package.

www.businessweek.com...

With their high-profile moves to save Britain's Bradford & Bingley (BB.L), Belgium's Fortis (FOR.BR), Germany's Hypo Real Estate Group (HRXG.DE), and Iceland's Glitnir Bank government officials are changing the rules of the game in Europe.

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And now, today, the headlines read:

www.financialexpress.com...

Within a few days of extending a lifeline to the beleaguered Fortis, the Netherlands government has acquired the Dutch subsidiary of the banking and insurance major for about 16.8 billion euro.

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So, 'thanks' to the Wall Street tribulations, Banks in Europe are getting nationalized as well. Just thought I'd bring it up because the attention seems entirely focussed at the States, while this is a global issue.

Yes, the Irish Government also had to give full guarantee's on all deposits and banks to the sum of €400bn to stop a complete catastrophe.

Click

I was talking to an uncle of mine that is in a top position in a Japanese bank in Dublin, he said three Irish banks would have completely collapsed by tomorrow if the Government had not given this guarantee.
The guarantee brought almost €30 billion extra in deposits in four days which freed up liquidity and basically saved our economy.

The BeNeLux countries would be completely correct in taking the same action. The only problem is, the larger countries that cannot guarantee all deposits will suffer from bank runs and transfers of funds to banks in the 'safe' countries in the EU.

I do not believe the Belgian gouverment is capable of actually living up to that promise.

Allready, in the papers, the Prime Minister has stated that next years budgeting will 'not be painless' (we get to fork out this money)

If you know Belgium, and it's finances, our gouverment is indebted, not exactly a position where you can guarantee funds of an entire bank's accounts.. one of the major players of Belgium, no less...

I doubt there are any 'safe' countrys anymore, either, or it would have to be the handfull of holdouts that have resisted the central bank system so far.. and I don't think any of those is in Europe, come to think of it.

*edit* hadn't heard about the situation in Ireland though, thanks for clueing us in on that

[edit on 5-10-2008 by Phatcat]

reply to post by Phatcat


Yes, i have heard about the situation brewing in Belgium over the last couple of years, we are not in a situation to much different - the credit crunch and house prices plummeting pushed us into a recession this year.
The government here took a gamble by guaranteeing all the banks and deposits when they probably wouldn't have been able to pay them all either if they had collapsed..

But it seems to have worked for the time being.

And yes, there are definitely no completely 'safe' countries at the moment in the EU.

Today in the papers: France bought the Belgian branch of Dexia.

also, in the same newspaper (Het Laatste Nieuws) a rapport that short-selling is allowed again.

tried to find a link online but no luck so far.. I'll keep looking though

*edit* what's up with the title of my thread by the way ?

When I posted it, it read: Europe also bailing out banks!

magically, it changed to 'Dollar gains as European banks falter'...

[edit on 6-10-2008 by Phatcat]