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More bank bailouts in Europe, U.S.

The credit crunch and acute loss of confidence since the collapse of Lehman Brothers a fortnight ago claimed four victims in the European Union finance sector over the weekend and another major U.S. bank.

In the latest of an impressive series of bailouts the Belgian Government and regional administrations in that country, it was reported that he agreed to rescue the Dexia bank, a Franco-Belgian financial group. Dexia has a business of big funds management in Australia.

No sign of a cost figure for the moment, but local media said it could be as high as 7 million euros, or about $ A12 billion.

It came 24 hours after the Belgian government has participated in the rescue of Fortis, which also has operations here. That will cost 11 billion euros from the governments of Belgium, Netherlands and Luxembourg.

Fortis, the Belgian-Dutch giant was rescued, Hypo Real Estate, a big German property lender was also rescued by emergency funds from competitors and Bradford & Bingley in the UK was nationalized After the pieces were sold.

The Icelandic government took over Glitnir, the third-largest bank which had expanded through loans short-term, triggering the biggest drop in the stock market in the country in its history and forcing an investment company associated in Britain administration. That was the largest shareholder and its failure BankLA endangers other companies in which it had shareholders.

And as the debate in U.S. Congress unfolded, Wachovia, the sixth country's largest lender, was rescued by Citigroup, with the U.S. government visit $ US12 billion share of the largest bank the country.

The German government bailout of Hypo Real Estate will cost an incredible € 35billion, or about $ US55 billion.

Central banks, led by the Federal Reserve revealed more liquidity swaps around midnight last night our time.

A total of $ US330 million dollars in swaps was done with major central banks to increase the amount in question from Lehman Brothers to a massive $ US630 million.

The Fed also increased its U.S. system between national funding agencies to run auction service called its banking system, increasing the amount of $ US75 billion on each auction and reveals a total of $ US350 billion in special auctions in November.

RBA of Australia made an exchange of U.S. $ 20 billion dollars with U.S. Federal Reserve, plus the $ US10 billion swap done last week.

All the new swaps are scheduled for late next March when central banks try to calm markets and provide liquidity to handle the end of the quarter (today) and then the end of the year.

Fortis was the biggest surprise, a mystery as the Financial Times put it this morning.

An apparently healthy financial group, no real problems, but one of confidence, many of the assets and liquidity, but suddenly weak. .

And the worrying about these is lost is the speed with which they came: it is clear that the credit crunch after the bankruptcy of Lehman is gaining momentum around the world and moving offshore from the U.S., where the focus has been.

The Fortis rescue saw horrible revealed word: "multinationalised" which means a company taken over by more than a national government.

Given how the credit crunch is going on, could very well become a word we hear more.

He appeared yesterday to describe the way in which Fortis was rescued from probable collapse by a trio of European governments that joined in a rare move to rescue border.

Belgium, the Netherlands and Luxembourg are pooling € 11200000000 ($ US16.3 billion) to rescue Fortis, which last week was feared to be on the verge of insolvency large following related credit depreciation and strong sales of the group's actions, even though short selling is banned in Belgium and Holland.

government of each country will units of equal size in Fortis's banking operations in that country: Belgium will acquire a 49% stake in Fortis's Belgian banking units to 4.7 million euros ($ US6.8 billion), and the Netherlands will buy a similar sized share of Dutch bank Fortis by 4 million euros ($ US5.8 billion).

Little Luxembourg is extending a loan of 2.5 billion euros ($ US3.6 billion) that can be converted into a 49% of Fortis's banking on that small country.

And, in terms of the bailout, Fortis will to sell parts of ABN Amro it acquired last year in a joint bid with RBS in the UK and Santander of Spain.

This triumvirate was the antithesis movement by the three governments to save Fortis, which has never found himself in this position, he had withdrawn from the ABN adventure when the credit crisis began.

Similarly, RBS has been forced to sell assets, raise new capital and cut costs due to a combination of subprime losses and the cost of their participation in the financing of the ABN bid, which remains unfinished.

RBS has raised more than $ 30 million and now looks for a buyer for part of Fortis assets ABN will be found.

RBS does not have the resources and Santander has helped rescue the depositors at the mortgage bank Bradford & Bingley following its purchase of Alliance & Leicester a few months ago, also in the UK. It is also facing a crisis of ownership in the domestic market in Spain.

So Fortis can not be out of danger, unless a government wants to buy ABN assets (highly unlikely).

Fortis is the largest European firm so far being dragged by the credit crunch.

The rescue plan will hurt Fortis' largest shareholder, China Ping An Insurance, which holds a stake of 5%. Helped the Chinese group Fortis earlier this year by buying 50% of the business of Fortis fund management.

Ping An is diluted and says that now ends plans for the purchase of billions of dollars of business a part of Fortis Asset Management. Ping An paid $ US2.7 million for 4.2% of Fortis in 2007 and increased its interest to 5% in March.

Ping An shares are down 18% since last Thursday when news broke Fortis problems without much in the way alert in Europe the night before. They were down 9% in Hong Kong yesterday.

Fortis reported a profit decline of 49% in the second quarter due to credit-related amortization, which reduced earnings by 918 million euros ($ US1.3 billion) in the first half.

Fortis had half year suspended its dividend and planned to sell shares to recapitalize. But that was not enough.

In the UK, Santander is now busy sorting which now owns the collapse of Bradford & Bingley, which was once the eighth largest mortgage lender in the UK.

Santander will pay the $ A44 million in deposit business and branch network of B & B.

It paid $ US1.1 billion of assets and 197 branches.

$ B & A110 B of millions of dollars in mortgages and were nationalized.

Santander already owns Abbey and recently bought Alliance & Leicester.

Mortgages and loans shall be made with the nationalization of Northern Rock. That means the U.S. Government own more than $ A330 million in unwanted mortgages and loans of the two non-old building.

The B & B assets are concentrated in buying to rent and so-called low-doc mortgages, that rising delinquency rates, worse even than Northern Rock. It was a major donor to finance housing investor for homes and apartments in recent years years in Britain.

B & B price ratio has fallen sharply.

A year ago the stock price was around $ A6.60, but had fallen to around 45 C R. It s not known whether the shares will be worthless. Northern Rock shareholders on still have no idea whether their actions will become worthless.

The bank will be nationalized by using special legislation the Treasury put through when it became the Northern Rock into public ownership earlier this year.

In Germany, Hypo Real Estate Holding, the country's second largest commercial property lender, 2008 will leave its dividend after getting "thousands of millions of credit euros''línea to rescue the financial market turmoil.

€ 35000000000, a surprisingly large amount mind is the size of the bailout, raising questions as to how a blue chip German population could get so bad.

The provision of rescue loan by a group of German banks (organized by the Government) means Hypo Real Estate will to cut the value of the goodwill of its stake in Depfa Bank, which is based in Ireland.

Which will result in the elimination of the dividend.

Hypo problems have been gathering pace but emerged over the weekend when the German Financial Times website reported that it was on the verge of collapse and need some cash urgently.

"The new facility is a long-term focus and innovation that allows us to adjust our funding structure in order to accommodate the current malfunctioning of the international money markets,''chief executive Georg Funke was quoted as saying in the statement. "Hypo Real Estate Group not have to return to the unsecured money market for its return in the foreseeable future.''

The company reports the short-term loans in wholesale markets to lend long term by Depfa Bank for commercial property, among other things. The credit crunch cut the funding source

Hypo Real Estate did not name the lenders or say how much money he received.

That figure came from government sources and was one of the largest amounts so far for a single financial group. About $ A55 million. Hiccup has three fixed-rate financial products listed on the ASX here (a shout type and two coupons are specified).

The company had entered into talks with banks "in response to the extremely difficult conditions in international money markets following the collapse of Lehman Brothers and other market disruptions.''

The German lender HVB separated from Group in 2003. Was surprised by the sudden depreciation of collateralized debt obligations in January, which saw shares fall 35%.

Hypo Real Estate said last month that profit before tax for the second quarter fell 95% due to price cuts on debt related investments.

Hypo Real Estate seek new investors earlier this year to shore its balance sheet and a group led by JC Flowers & Co., the U.S. buys bought 24.9% of Hypo Real Estate June for about € 1,130,000,000. (About $ A1.9 billion). JC Flowers has lost $ U.S. $ 1.5 billion in the rescue.

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