Bank of England steps in to the money markets
Despite all of the promises of assistance from the US government it seems that money markets are in a state of paralysis awaiting news of the battle between the Democrats and Republicans. This has prompted a worldwide effort to pump temporary money into the markets with the Bank of England leading the way with a £40 billion three month injection. Moves are also afoot to allow banks to exchange some of their assets for additional liquidity with a figure in the region of $30 billion being mentioned for this separate issue.
The moves have been forced upon banks around the world after negotiations to see the bailout package through Congress have seemingly reached a stalemate. There are many reasons why the package should be pushed through but there are risks involved and the figures being mentioned are astronomical. If the bailout was to receive the approval of Congress and fail in practice then we would all be in a much worse situation than before the crisis.
This really is the last throw of the dice for worldwide markets with many governments around the world hoping and praying the deal goes through. The consequences of markets being left to their own devices are not worth even contemplating!
Share this..
Related stories
FSA stress tests consider worst-case scenario
While the Financial Services Authority (FSA) has refused to reveal the results of various stress tests on the U.K.'s financial sector and financial companies, the FSA has revealed details of its criteria. It is worth while stressing that this is a worst-case scenario, and one which is unlikely to happen, however the FSA used a figure of 12% unemployment, no growth in the economy until 2011, a 50%...
Read MoreCBI demands introduction of a job suspension scheme
The Confederation of British Industry (CBI) has today stepped up its campaign for government assistance in the employment market. Introducing a potentially revolutionary idea to the UK employment market, the CBI wants an alternative to redundancy scheme introduced which would see companies are allowed to suspend employee's contracts for up to 6 months.
During this period, employees...
Nationwide warns on UK housing
After reporting pre-tax profits of £117 million for the six months to 30 September, a fall of 63% on the corresponding period last year, Nationwide has today warned of "inevitable downward pressure" on UK house prices next year. This is a stark warning from a company which is well respected in the UK property sector and would appear have its " finger on the pulse" of the UK housing market. So wha...
Read MoreCalls to boycott Royal Mail
As we covered yesterday, this Christmas will be very difficult for those expecting gifts and cards through the post and many businesses may well see their cash flow impacted adversely by the proposed strike action at Royal Mail. Not only has the company allegedly lost a £25 million contract with Amazon but eBay and Argos are reviewing their arrangements ahead of the vital Christmas period. So wha...
Read MoreFSA to launch enquiry into Royal Bank of Scotland non-exec directors
In a rather bizarre move the Financial Services Authority has been asked to step in and investigate alleged "intimidation" of non-executive directors on the board of Royal Bank of Scotland. Lord Foulkes has claimed a number of non-executive directors have expressed concerns regarding their treatment when holding positions on the Royal Bank of Scotland board of directors.
The allegat...