MAIL Online: Banks 'ask Darling for £50billion cash injection' / Royal Bank of Scotland shares plunge a massive 40% / FTSE rally wiped out as it tumbles back into the red / British savers frozen out by Icelandic internet bank / EU summit to discuss £80,000 savings guarantee
British banking shares plunged today after it was claimed finance chiefs had asked the Chancellor for a £50billion bail-out to stave off further turmoil.
The report by BBC business editor Robert Peston unleashed a fresh day of chaos on the Stock Market, with shares in Royal Bank of Scotland tumbling by 40 per cent at one stage in early trading.
Its value plummeted by a massive £10billion on top of the 20 per cent fall yesterday despite the bank's denial that it had asked the Government for capital at a secret meeting last night.
Lloyds TSB also saw its value drop up to 26 per cent. HBOS fell by 23 per cent and Barclays by 17 per cent as investors panicked at the prospect of household names being part-nationalised and launched a mass sell-off.
After its biggest ever one-day drop in history, the Stock Exchange initially rallied by almost three per cent on the back of a late surge on Wall Street and a huge rates cut in Australia but the turmoil around the banking sector soon dragged it back into the red.
Throughout the morning, it swung between positive and negative territory in an echo of the mixed fortunes of markets in Asia and Australia overnight. Bank Shares Plunge up to 40% in an Hour After News of £50bn Banks Deal Was Leaked to the BBC >>> By Nicola Boden | October 7, 2008
THE TELEGRAPH:
Financial Crisis: Alistair Darling Under Fire over Banking Meltdown: Alistair Darling, the Chancellor, is under fire after the banking crisis intensified as billions were wiped off the value of Britain's high-street banks in minutes. >>> By Robert Winnett, Deputy Political Editor | October 7, 2008
THE TELEGRAPH:
Financial Crisis: Who Is Advising Alistair Darling?: The team helping Alistair Darling to prepare Britain's response to the ongoing financial turmoil.
Geoffrey Spence is one of the central figures in the small team around Mr Darling drawing up plans to help struggling banks.
Mr Spence, was a former senior investment banker at HSBC, Deutsche Bank and Allco Finance Group who joined the Treasury's Council of Economic Advisers in April. He previously helped mastermind the Government's controversial private finance initiative. >>> By Robert Winnett, Deputy Political Editor | October 7, 2008
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