Key events on Monday: In the US, Wachovia, the sixth-largest lender, was rescued by Citigroup in a government-sponsored bail-out that will see the US government take a $12bn stake in the country’s largest bank. In Europe, the German government underwrote a €35bn bail-out of Hypo Real Estate, a mortgage lender and financier to local authorities, while Iceland took control of Glitnir, the country’s third-largest bank and Irish banks –which are particularly dependent on the interbank lending market – suffered huge share price falls. In Britain, Bradford & Bingley’s £52bn mortgage book was taken into national ownership as Spanish bank Santander agreed to take over the stricken mortgage lender’s deposits and branch network. The bail-outs followed the €11.2bn rescue of Fortis, the Belgo-Dutch group, by three European governments late Sunday night, and triggered sharp falls in bank shares, including Dexia, Commerzbank, ING and RBS. In the US, shares in regional banks also plunged.

This entry was posted by Gwen Robinson on Tuesday, September 30th, 2008 at 5:46 and is filed under Capital markets. Edit this entry.