Additionally, the European Central Bank joined with the U.S. Federal Reserve in doubling the credit swap line that makes dollars made available to cash-hungry banks from $120 million to $240 million. The Bank of England doubled dollar availability to $80 billion, while other central banks offered smaller amounts. Once again European governments are attempting to avert a growing crisis of confidence in the financial markets and the broader economic implications of the current turmoil while not returning to many of the socialist or apperance of socialist responses.
UK Government Nationalizes Bradford & Bingley
The British government on Monday confirmed it was nationalising Bradford & Bingley after hammering out a deal with the Spanish bank Santander, which will buy the embattled UK mortgage lender's £21bn deposit book and branch network for about £600m.
The bank was taken into public ownership on Monday after B&B saw retail savers withdraw "tens of millions of pounds" in recent days as uncertainty grew.
Dutch-Belgian bank and insurance giant Fortis NV was given a 11.2 billion euro ($16.4 billion) lifeline to avert insolvency as part of a wider bailout plan agreed to by Belgium, the Netherlands and Luxembourg, officials said Sunday.
Basically the governments of Belgium, the Netherlands and Luxembourg took partial control late Sunday of struggling bank Fortis NV.
Germany's second-biggest commercial-property lender, Hypo Real Estate, will receive a 35 billion-euro ($50 billion) loan guarantee from the government and a group of banks to save it from potential collapse.
The Icelandic government on Monday said it had taken over Glitnir, the island’s third largest bank, by injecting €600m ($862m) of equity after the lender’s funding position sharply deteriorated.
The bank rescue confirmed market worries about the ability of Iceland’s banks to withstand the current credit squeeze, given their weak base of deposits at home and their dependence on wholesale funding. Icelandic banks have increased their balance sheets aggressively in recent years to expand out of their volatile home market.