In Europe, mkts sank to 4-year closing lows as investors dumped shares across the board and Wall Street slumped. The govts of Belgium and Luxembourg arranged a deal under which French lender BNP Paribas will take over the Belgian and Luxembourg operations of Fortis for roughly 15 bln euros in cash and stock, after a previous rescue plan last week failed to prevent an exodus of customers, while the Netherlands nationalized the Dutch wing of the company. Turmoil escalated in Iceland, as the govt is scrambling to avert a financial meltdown after authorities failed to agree any specific measures over the weekend. In Italy, the board of banking giant UniCredit announced that it would launch a 3 bln euro emergency capital increase, just days after UniCredit's chief executive had gone on national television to say that the bank was solid. Also, the European Union pledged to protect people's savings and maintain financial stability...
In the UK, the FTSE fell 7.9%, with banking and commodity stocks taking a battering as the fallout from financial crisis once again overwhelmed global markets. The UK finance minister Alastair Darling told parliament in the afternoon that a Banking Bill will be introduced Tuesday to build on special powers the UK government took in February. The bill will also give the Bank of England a statutory role to maintain financial stability, the UK finance minister added. In equities, banks were among the biggest blue chip fallers with Barclays (BCS), Royal Bank of Scotland (RBS) and HBOS down between 14.7 and 20.5%. Heavyweight mining stocks suffered as metals prices fell on fears that the financial crisis would lead to a wider economic slowdown and shrink demand...
In Germany, the DAX tumbled 7.1%, as the yearlong debt-market seizure forced the country's financial industry to double a credit line for Hypo Real Estate Holding and the government to guarantee personal savings accounts. Hypo Real Estate, the nation's second-biggest commercial- property lender, tumbled 37% as the government and the country's banks and insurers agreed on a 50 bln-euro ($68 bln) rescue package after an earlier bailout faltered. Separately, Chancellor Angela Merkel said the govt will guarantee personal savings for account holders...
In France, the CAC closed down 9.0%. (Sources: Bloomberg, Reuters, DJ, FT, Thomson, Forbes)