Traders on the New York Stock Exchange watch shares tumble yesterday.
Traders on the New York Stock Exchange watch shares tumble yesterday.

Bank crisis spreads to Europe



The global banking crisis spread to Europe yesterday, even while the US Congress looked likely to approve the country's US$700bn (Dh2.57 trillion) bailout. Collapsing financial institutions in Europe are now the focus - yesterday the giant Dutch-Belgian bank Fortis and Britain's Bradford & Bingley were nationalised by their respective governments. Germany's second-biggest commercial property lender, Hypo Real Estate, was provided with a ?35bn (Dh185.3bn) loan guarantee by the German government to prevent its collapse, while Iceland's government agreed to buy 75 per cent of Glitnir Bank.

The purchase of the beleaguered US bank Wachovia by Citigroup merely reinforced the mood in late European trading. These events dragged all European bourses down - the London FTSE Index closed down five per cent, and the French and German bourses were down 4.5 and 4.18 per cent, respectively. Banking stocks were hammered as traders looked for the next victim. Royal Bank of Scotland was one of the hardest hit, with its shares falling 21 per cent, while shares in the Belgian-Dutch bank Dexia plunged 30 per cent on fears that it, too, may need to raise funds to bolster its capital. In a statement, Dexia insisted that it had no liquidity problems.

Even the German giant Deutsche Bank was hit, losing 10 per cent, while Lloyds TSB - which took over the troubled mortgage company HBOS last week - saw its shares fall by 13 per cent. The UK banking fear is partly linked to its shrivelling mortgage market. Banks and building societies lent a net £143 million (Dh950m) in home loans last month, just five per cent of July's lending figure and only two per cent of the lending in August last year. This reflects the almost complete drying up of credit in the UK.

European gloom yesterday dragged down the Dow Jones industrial average, which had fallen two per cent after 20 minutes of market activity. While all hopes had been pinned on the US bailout, markets appear doubtful that it will be effective. "A rescue plan worth $700bn is simply not enough to overcome the crisis for the foreseeable future," said Carsten Klude, a strategist at MM Warburg. "If anything, all the real economy problems will escalate as a result in the foreseeable future."

There was also concern that Europe might not be able to fund the cost of its multiple nationalisations. Simon Derrick, the chief currency strategist at Bank of New York Mellon in London, agreed. "The growing negative events in the Euro zone are shifting the balance very swiftly to the dollar on the front foot," he said. "There are massive questions about how they are going to fund these nationalisations."

Asia set the tone for the day, with the Hong Kong market plunging 4.29 per cent, the Tokyo Nikkei down 1.26 per cent and Singapore losing more than two per cent of its value. Interbank interest rates rose yesterday - the UK rate increased by 0.12 per cent, as did the UAE's rate. GCC markets bucked the trend of the rest of the world yesterday, prior to closing for a week for the Eid al Fitr holiday.

The Dubai Financial Market closed up 1.66 per cent, the Abu Dhabi Securities Exchange climbed 0.42 per cent and Doha gained 2.65 per cent. The Saudi market was closed, and while Muscat and Kuwait were up slightly, Bahrain was the only GCC market to decline, falling 0.06 per cent. * With Agencies @Email:afoxwell@thenational.ae European banks rescued, b11

Cry Macho

Director: Clint Eastwood

Stars: Clint Eastwood, Dwight Yoakam

Rating:**

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How the bonus system works

The two riders are among several riders in the UAE to receive the top payment of £10,000 under the Thank You Fund of £16 million (Dh80m), which was announced in conjunction with Deliveroo's £8 billion (Dh40bn) stock market listing earlier this year.

The £10,000 (Dh50,000) payment is made to those riders who have completed the highest number of orders in each market.

There are also riders who will receive payments of £1,000 (Dh5,000) and £500 (Dh2,500).

All riders who have worked with Deliveroo for at least one year and completed 2,000 orders will receive £200 (Dh1,000), the company said when it announced the scheme.

The biog

Prefers vegetables and fish to meat and would choose salad over pizza

Walks daily as part of regular exercise routine 

France is her favourite country to visit

Has written books and manuals on women’s education, first aid and health for the family

Family: Husband, three sons and a daughter

Fathiya Nadhari's instructions to her children was to give back to the country

The children worked as young volunteers in social, education and health campaigns

Her motto is to never stop working for the country

The biog

DOB: March 13, 1987
Place of birth: Jeddah, Saudi Arabia but lived in Virginia in the US and raised in Lebanon
School: ACS in Lebanon
University: BSA in Graphic Design at the American University of Beirut
MSA in Design Entrepreneurship at the School of Visual Arts in New York City
Nationality: Lebanese
Status: Single
Favourite thing to do: I really enjoy cycling, I was a participant in Cycling for Gaza for the second time this year