October 2008
31 October 2008
Barclays looks to secure a capital injection worth around £7.3bn from Middle Eastern governments, including the Qatar Investment Authority and an Abu Dhabi-based sovereign wealth fund. If the deal is completed as expected, the Middle Eastern investors will have an almost 32% stake in Barclays.
The US economy shrank at an annualised rate of 0.3% between July and September, according to figures from the Commerce Department. The Federal Reserve has cut its key interest rate from 1.5% to 1% in order to stave off recession.
American International Group (AIG) has raised US$20.9bn from a new Federal Reserve lending facility, which is designed to boost the commercial paper market, to repay part of a Fed loan. As of Wednesday, AIG owed the US government $83.5bn, down from $90.3bn a week ago.
Japan unveils a US$50.8bn economic stimulus package, the second in two months. The stimulus plan follows the passing of a US$2bn supplementary budget earlier this month to fund Japan’s first stimulus package.
American Express announced plans to cut 7,000 jobs as part of a plan to save US$1.8bn by the end of 2009.
Hungary has been granted a $25bn rescue package by theIMF , the EU and the World Bank.
China's central bank has cut the country's interest rate by 0.27% from 6.93% to 6.66% in order to stimulate economic growth; while Iceland's central bank has raised its key interest rate to 18% from 12%.
The Bank of England says the world's financial firms had now lost £1.8 trillion (US$2.8 trillion) as a result of the continuing credit crisis.
The International Monetary Fund (IMF) is to offer a US$16.5bn (£10.4bn) loan to Ukraine.
28 October 2008
The European Community announces plans that is ready to participate in a co-ordinated financing package with the IMF to underpin balance-of-payments sustainability in Hungary. The Community stands ready to provide a loan of €6.5bn to Hungary under the Community medium-term assistance facility established under Article 119 of the Treaty in conjunction with IMF assistance to the amount of €12.5bn and World Bank assistance of €1bn. The concrete modalities will shortly be finalised in co-operation with the Hungarian authorities.
27 October 2008
TheNordic countries declare their readiness to helpIceland in battling the current financial crisis. A high-level committee will consider Iceland's financial needs following a planned loan from the IMF, and look into how the Nordic states could assist in co-operation with the IMF.
24 October 2008
The Danish central bank raises its key interest rate by 0.5 percentage points to 5.5%.
The Office for National Statistics in the UK releases figures that indicate the country is on the brink of a recession. The economy shrank for the first time in 16 years between July and September, as economic growth fell by 0.5%.
21 October 2008
The French government will inject €10.5bn into the six largest players in an effort to shore up their balance sheets. Credit Agricole would receive €3bn, BNP Paribas €2.55bn, Societe Generale €1.7bn, Credit Mutuel €1.2bn, Caisse d'Epargne €1.1bn, and Banque Populaire €0.95bn.
20 October 2008
The chairman, director general and chief financial officer of Caisse d'Epargne resigns following the bank's €600m loss announced on 17 October. The bank said its problems would not affect its planned merger with Banque Populaire.
ING accepted a €10bn capital injection from the Dutch government to shore up its core capital. The Dutch banking and insurance group also agreed to sell its Taiwan life insurance unit to Fubon Financial for $600m.
South Korea announced a rescue package worth about US$130bn for its banks and companies suffering from a foreign currency liquidity crunch.
BayernLB , the state-owned regional lender, will become the first German financial institution to accept assistance, seeking up to €5bn from the government's €500bn rescue package.
Sweden guarantees new medium-term liabilities of banks up to a level of £117.2bn.
Merrill Lynch CEO John Thain says he expects to see thousands of job cuts in IT, finance, and administration as the company looks for US$7bn in savings from its merger with Bank of America.
17 October 2008
French savings bank, Caisse d'Epargne , announces a loss of €600m in a 'trading incident' which the bank said was triggered by what it called "extreme market volatility" amid the market crash during the week of 6 October.
Switzerland has agreed to fund a vehicle that would take on most of the toxic debts held by UBS and injecting €3.9bn to help recapitalize the bank.
The European Central Bank gives Hungary €5bn credit line.
Five Austrian banks - UniCredit unit Bank Austria, Erste Bank, Raiffeisen Central Bank, Austrian Volksbanken and BAWAG - have taken over Constantia Privatbank as part of the government's plan to help stabilise financial markets.
14 October 2008
Lloyds TSB takeover of HBOS falters. UK Treasury drafts full-blown nationalization plans.
13 October 2008
The G7 nations - which comprise the US, Japan, the UK, Germany, France, Italy and Canada - issued a five-point plan of ‘decisive action’ to unfreeze credit markets, after a meeting in Washington. The specific details of this plan have not been released.
The German and French government unveiled plans to restore liquidity and inject fresh capital into their banking sectors - as part of a co-ordinate bailout campaign by western governments. Germany will inject up to €470bn, while France’s plan totaled €340bn. The Netherlands proposed a €199bn rescue plan and Austria offered a similar package worth €85bn. Spain set aside up to €100bn to back up debt issued by banks this year, and Portugal pledged about €20bn in guarantees. Italy promises banks as much as they need.
Spanish banking group Santander agreed to buy the rest of US banking group Sovereign Bancorp for $2.4bn, a tenth of the price agreed when it took a minority stake three years ago.
The US is expected to commit US$250bn, out of the US$700bn rescue package agreed earlier this month, to a recapitalisation programme, providing a temporary sovereign guarantee for bank borrowing and expand depositor protection. About half the money would be invested in bigger US banks including Bank of America , JPMorgan Chase , Citi , Wells Fargo , Goldman Sachs and Morgan Stanley - with the largest lenders receiving as much as US$25bn.
Royal Bank of Scotland , Lloyds TSB and HBOS agreed to scrap dividend payments in exchange for a government rescue package of £37bn.
The Federal Reserve has approved a $12bn takeover of Wachovia and its subsidiaries by Wells Fargo , beating out Citi.
Britannia , the UK’s second-largest building society, is in early stage discussions with the financial services arm of the Co-operative Group about combining the two businesses.
10 October 2008
Commonwealth Bank of Australia (CBA) acquires BankWest unit - which operates in Western Australia - from UK's HBOS - for US$2.1bn. BankWest will now be part of CBA's four year migration of its core banking operations to the SAP for Banking platform, which was outlined in April.
9 October 2008
The US stock market suffered its largest loss since the crash of 1987 amid panic over General Motors, Morgan Stanley and several big insurance companies.
Russia approved a raft of measures worth US$86bn to assist banks hit by the credit freeze. The government will make US$50bn available to banks and firms that need to refinance foreign debt. The rest will be available as loans to banks.
8 October 2008
The UK government agrees a £400bn three-prong plan to bail out British banks. The government could invest as much as £50bn in the banking industry while offering guarantees over as much of £250bn of new bank debt and adding £100bn to the existing Bank of England short-term loan scheme. The banks involved are Abbey , now part of Santander of Spain, Barclays , HBOS , HSBC , Lloyds TSB , Royal Bank of Scotland and Standard Chartered as well as Nationwide Building Society.
Six central banks - theBank of Canada , theBank of England , the European Central Bank , the Federal Reserve , Sveriges Riksbank , and the Swiss National Bank - announce reductions in policy interest rates.
The Federal Reserve agrees to inject up to an additional US$37.8bn into AIG.
UK government announces plans to sue Iceland over UK customer deposits in Icesave, the failed Internet bank seized by Iceland.
ING Direct UK will acquire £2.5bn of deposits and 160,000 customers from Kaupthing Edge. The group is also acquiring £538m of savings held by 22,200 people with Heritable Bank , a subsidiary of Landsbanki.
7 October
Russia commits to pumping US$37bn in long-term loans into its biggest state banks.
The Federal Reserve announced a new commercial paper lending facility to jump start funding for companies.
Commonwealth Bank of Australia is in talks to buy BankWest , the Australian subsidiary of HBOS, in a deal for A$2bn.
6 October 2008
Germany announces a €50bn plan to save one of the country's biggest banks, Hypo Real Estate , which is worth €15bn more than the first rescue attempt, which fell apart a day earlier.
French bank, BNP Paribas , buys the Belgian insurance business of Fortis while ownership of EMCF , the Fortis Bank subsidiary that provides clearing services to Instinet Chi-X and Nasdaq OMX, passes to the Dutch government as part of a €16.8bn rescue package.
Iceland's government takes control of the country's second largest bank, Landsbanki.
Nomura International, the Asia-based investment bank, announces that the conditions to closing the acquisition of Lehman Brothers ' investment banking and equities businesses in Europe and the Middle East had been met. The deal will become legally effective on Monday 13 October. Nomura Holdings also announces that it has made an agreement with Lehman Brothers Holdings Inc. to acquire Lehman Brothers Services India Private Limited, Lehman Brothers Financial Services (India) Private Limited, and Lehman Brothers Structured Finance Services Private Limited, all specialized service companies based in Powai, Mumbai.
3 October 2008
Wells Fargo announces it is set to buy Wachovia for US$15.1bn, which scuppers an earlier US government-backed rescue deal in which Citi would buy Wachovia's banking arm for US$2.2bn.