European Banks Rescue Companies as U.S. Crisis Spreads
As tremors from the U.S. credit crisis reverberated around the world, European governments stepped in to rescue Fortis, Bradford & Bingley Plc, and Hypo Real Estate Holding AG.
The U.K. Treasury seized Bradford & Bingley, Britain's biggest lender to landlords, while governments in Belgium, the Netherlands and Luxembourg threw an 11.2 billion-euro ($16.3 billion) lifeline to Fortis. Germany guaranteed a loan to Hypo.
The interventions exposed how fallout from the crisis that drove Lehman Brothers Holdings Inc. into bankruptcy and prompted a $700 billion U.S. bank-rescue package has gone global. It also added urgency to negotiations among European policy makers as to how they deal with banking collapses.
"The precarious global environment means the weakest links in Europe are now falling,'' said Mamoun Tazi, an analyst at MF Global Securities Ltd. in London. "If banks continue not to lend to each other we'll see more failures.''
Published on September 29, 2008
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