|10-12-2008, 07:29 PM||#1|
Just hanging out.
Join Date: Aug 2005
Some good news at last.
Markets rally after crisis talks
Asian markets have reacted positively to efforts by world leaders to end the recent financial turmoil.
Sydney's benchmark index leapt 5.5%, as markets in South Korea and Singapore opened up around 3%. Tokyo's market was closed for a public holiday.
EU leaders earlier said no big bank would be be allowed to fail, as they agreed a plan to tackle the crisis.
World governments had been racing to throw financial institutions a lifeline before the major markets re-opened.
The European plan was confirmed after a Paris summit of the 15 eurozone leaders on Sunday, at the end of a weekend of crisis talks between finance ministers of the main economic nations - the G7 - and the International Monetary Fund.
Saturday's G7 crisis talks in Washington resulted in a five-point plan of what the ministers called "decisive action" to unfreeze credit markets. On Sunday, a number of individual countries announced rescue plans for their banks.
Australia's Prime Minister Kevin Rudd said his government would guarantee all bank deposits, whatever their size, for the next three years.
Correspondents say that type of move raised investor confidence as markets opened.
UK cash injection
Under the eurozone plan, members pledged to guarantee loans between banks until the end of 2009, and said they would put money into them by buying preference shares.
French President Nicolas Sarkozy - whose country currently holds the rotating presidency of the EU - said the group was taking unprecedented steps.
The plan was similar to one announced by Britain last week, and although the UK is not a member of the eurozone club, British Prime Minister Gordon Brown attended parts of Sunday's talks.
Under the UK rescue package, up to £50bn of taxpayers' cash is to be injected into four of Britain's biggest banks, according to BBC business editor Robert Peston.
Royal Bank of Scotland (RBS), HBOS, Lloyds TSB and Barclays have been told by Treasury officials to seek the cash to shore up their balance sheets, and an announcement is expected before London's financial markets open later.
Governments in Germany, France, Italy and elsewhere are due to present their individual plans later, within the agreed eurozone framework, said Mr Sarkozy.
The poorest and most vulnerable groups risk the most serious - and in some cases permanent - damage
World Bank president
"The crisis has over the past few days entered into a phase that makes it intolerable to opt for procrastination and a go-it-alone approach," he said.
Mr Sarkozy said the plan addressed all aspects of the financial crisis, but he did not say how much it would cost.
Analysts say sheer nervousness has been a big factor in the recent share price falls.
But European Commission president Jose Manuel Barroso - also at the talks - said the plan would end "the excessive pessimism of the markets."
Poor at risk
The plan was welcomed by the head of the International Monetary Fund, Dominique Strauss-Kahn, who said he thought "the comprehensive response to the crisis" would be reflected in Monday's market performance.
But even as attention focused on rescue plans for nations of the rich West, the head of the World Bank, Robert Zoellick, warned that the global crisis could hit developing countries even harder.
"The poorest and most vulnerable groups risk the most serious - and in some cases permanent - damage," he said.
Some developing country officials are concerned the crisis will lead to aid cuts, says the BBC's economics correspondent, Andrew Walker.
The IMF, which has $250bn available to lend, says there has been an incredible increase in the number of countries asking for help in the last two weeks, our correspondent adds.