Latest News:  
Beijing   Sunny/Cloudy    24 / 34   City Forecast

Home>>

Banks again pummeled as uneasiness grips up

By Wen Sheng (People's Daily Online)

14:55, August 11, 2011

European and U. S. banks were swooned Wednesday at the markets as investors sold off bank shares in a scene reminiscent of the days in September 2008 when America’s sub-prime crisis began to bring down Wall Street and jolt the financial world.

This time, fear in on the rise because traders were spooked by worsening balance sheets at some of Europe’s biggest banks, as many of them have been disproportionately exposed to sovereign debts in troubled countries including Italy and Spain.

Share price of Societe Generale, the largest French bank, tumbled 14.7 percent, despite its chief executive denied “all rumors” that he believed caused the stock pounding. Shares of Intesa Sanpaolo of Italy fell nearly 14 percent. Credit Agricole and AXA Financial of France dropped more than 10 percent apiece.

U.S. banks were also pummeled. Bank of America dropped almost 11 percent. Citigroup sank 10.5 percent. Goldman Sachs fell 10 percent, while Morgan Stanley lost 9.7 percent. It is believed that the hidden troubles of European banks were feeding concerns about the stability of American banks and other financial organizations.

Now, investors have been on the rope as they are worried about Europe’s fiscal disease spreading to core trading partners like France. Nowhere is that nervousness greater than in the short-term financing markets, where European banks turn to American money funds each day for tens of billions of dollars in funding.

Inter-bank borrowing rates are drifting higher over the last week for several big European banks – an ominous phenomenon also happening in autumn 2008 before the global financial crisis struck. American mutual funds and other funds have been cutting back exposure to French banks. As a result, some French lenders including Societe Generale were forced to pay more to borrow.

Investors will be extremely nervous in the coming days to guard against any more bad news concerning euro-zone fiscal doldrums, or any deterioration in European lenders’ ability to head off a possible panicky run on their savings. If that happens, the world will sink to another big crisis.

Email|Print|Comments(Editor:张茜)

Leave your comment5 comments

  1. Name

russian nde at 2011-08-12206.248.255.*
save the best for last
ab at 2011-08-12206.248.255.*
save the best for last
Edmad at 2011-08-12218.186.8.*
Are we all prepare for the worst prolong global economic downfall of all time? The entire world need a collective effort to pull everyone out of this mess. But before any remedial actions could be implemented effectively, all the political leaders must have the convictions to discard their selfish objectives, and cleansed their 'own house' thoroughly, as well as possessing the guts to prescribe the necessary 'bitter medicines and painful treatments' to cure its sicknesses. Short term remedies is not good enough. The patients' health have deteriorated for the worst. They need emergency treatments now, and don't hope for a miracle cure. It is going to be a painfully long operation and recovery process. If we still persist on the old path, only a few healthy ones will survived, but the majority will be doomed. Despite the gloomy economic sphere, it is another golden opportunity for China to shine on the world stage again. China did a wonderful job during the global financial crisis. This time round, China must be ready to put in as much efforts and sacrifices as possible in helping the US and Europe to get out of their economic doldrums. China can definitely play a key role and lead the rest of the major emerging markets to nurse the mature economies back to health, or at least stabilize their conditions in the short or medium term. If successful, the image of China would be very much enhanced, apart from the goodwill and respect earned. It would also removed much of the negative views and prejudices against the chinese. Go for it, China! Show the international community what China can do to contribute to world peace, progress and prosperity.
PD User at 2011-08-1158.68.145.*
Please stop blame China. The "analysis" is just trying to mislead your anger to something far away.The truth is -- the problem is within us: we have let the bankers run this country for too long, and they have been changing this once great country into a monstrous consuming machine. We are always encouraged to consume instead of produce, because that is how the banker would make money out of thin air. We think we are free, but we are not! The bankers are controlling every aspect of our life through our Mortgages, Credit Cards, Loans, and Government! We are working our entire life as a slave of the bankers!
jim at 2011-08-1158.68.145.*
What happened to the world economy?
  

Selections for you


  1. Opening ceremony of 26th Summer Universiade

  2. USS Ronald Reagan Aircraft Carrier arrives in HK for port visit

  3. China, Ukraine pledge to strengthen cooperation

  4. Emei Int'l Kungfu Festival held in China's Sichuan

Most Popular

What's happening in China

Thank you messages at opening ceremony of Shenzhen Universiade

  1. 54 high-speed rail line recalled over safety concerns
  2. One dead, over 30 injured in East China bus accident
  3. 77 people hospitalized in east China after eating lobsters
  4. Legendary Chinese judge has a case against popular Starbucks coffee mugs
  5. EU, Chinese youths discuss participation in policy-making

PD Online Data

  1. The Tartar ethnic minority
  2. The Xibe ethnic minority
  3. The Miao ethnic minority
  4. The Maonan ethnic minority
  5. The Lahu ethnic minority