A wave of selling swept through markets despite initiatives by governments around the world to tackle the financial crisis, fuelling speculation that co-ordinated emergency rate cuts by the Federal Reserve and other central banks might be in the offing. On Tuesday, Australia cut rates by a percentage point, more sharply than expected, reports Reuters.The Fed earlier announced measures designed to revive the credit and commercial paper markets, including discussions with the US Treasury that would mark a dramatic step into unsecured lending. While all major stock indices slid, emerging markets were particularly hard hit, leading to warnings that the crisis could prove a tipping point for many developing countries, bringing on business failures and banking emergencies. The stock market falls came amid a global wave of government initiatives, which failed to prevent investors from rushing to the safety of government bonds. Across Europe, governments followed Germany’s weekend move to guarantee retail savers’ deposits, with similar steps taken in Denmark, Sweden and Austria. In Iceland, the currency fell 30%. In Asia, the Korean won slid more than 5% as Seoul asked banks to sell foreign assets.
