I thought this bail out plan would have

[Lazie]

settled the markets? Thee Dow has dropped 300 points this morning.

[Assasin]

you nuh see banks still a go under?

Two European banks went under today as well.

It a go take some time to clean up this mess.

[Karl]

settled the markets? Thee Dow has dropped 300 points this morning.

Remember...we do not have a plan?!
They are working on one!

...unless one was passed and signed by the president this morning?
I have not yet heard of it!

[Islandman]

If them don't pass this plan 300 points is going to look like the good times.

Them better include the foriegn banks too cause Europe is a mess.

[Assasin]

Not all a Europe, mostly England.

Europe must be fuming as they didn't indulge like the US bankers and said they even warned the US authorities.

[MdmeX]

What's going on bredrin?

Europe seh dem warn the U.S., pity them neva did heed their own so-called warning

[Assasin]

only one European bank fail so far.

The banks that are failing are British banks.

They regulate their things better. The only problem many of them having is because of the credit crunch it is harder for them but the fact is they don't have the bad real estate portfolio we have.

[Karl]

only one European bank fail so far.

The banks that are failing are British banks.

They regulate their things better. The only problem many of them having is because of the credit crunch it is harder for them but the fact is they don't have the bad real estate portfolio we have.

suh hen-gland nuh Europe henny more?

[MdmeX]

Fortis reshaped by government bailout

Fortis reshaped by government bailout

Monday September 29, 10:19 am ET
By Toby Sterling, AP Business Writer

Belgium, Netherlands, Luxembourg pour billions into troubled bank Fortis

AMSTERDAM, Netherlands (AP) -- Shares of troubled bank Fortis NV slid again Monday despite a euro11.2 billion ($16.4 billion) government bailout, amid growing signs European banks have been hit harder by the U.S. financial crisis than they have been willing to admit.


Belgium, the Netherlands and Luxembourg agreed late Sunday to the cash injection to avert a run on Fortis, taking a 49 percent stake in exchange and demanding Fortis resell the share of ABN Amro it bought a year ago -- the very decision that brought about all its troubles.

Insolvency fears caused the company's shares to tumble more than 20 percent Friday to their lowest level in 15 years. After a short-lived rally at the open Monday they fell again, and were down 6.9 percent to euro4.83 ($6.93) in Amsterdam -- less than a fifth of what they were worth before the ABN buy.

At the same time Fortis was thrown a lifeline and a bailout agreement appeared near in the U.S., bank shares around Europe were groaning under a raft of bad news.

Germany's second largest commercial property lender Hypo Real Estate Holding AG announced it had received an emergency line of credit from other banks estimated at between euro25 billion and euro30 billion ($37 billion to $44 billion); Britain announced the nationalization of lender Bradford & Bingley, taking over its 50 billion pound ($91 billion) mortgage and loan portfolio; and shares in French-Belgian bank Dexia SA, a lender to local governments, fell nearly 30 percent on speculation it is preparing an emergency share issue.

Fortis, with headquarters in Brussels, Belgium, and Utrecht, Netherlands, is Belgium's largest retail bank, while ABN Amro is the largest in the Netherlands.

It paid euro24 billion for its share of ABN in October 2007, and said prior to Sunday's bailout it needed to raise around euro5 billion ($7.3 billion) in cash to maintain financial ratios as it integrated ABN's Dutch retail operations next year.

Fortis had insisted it could meet that shortfall by selling other assets, but analysts were increasingly skeptical as there are few buyers in the market and many sellers.

Traders too, appeared to think the bank was over-leveraged. The bank's total market capitalization is around euro12.1 billion ($17.5 billion) -- half what it paid for ABN.

Nout Wellink, the head of the Dutch central bank, said the U.S. financial crisis was partly to blame.

"What is happening in the U.S. has most certainly had an impact on the financial sector in the rest of the world," he told reporters. "Due to rumors, I have to say, Fortis became a bank in a special position."
Fortis said Monday it would be left with excess capital of euro9.5 billion ($13.8 billion) after its transformation. However it noted that to the extent ABN Amro's retail operations fetch less than euro12 billion ($17.4 billion), capital would be depleted.

"I am very happy to have this solvency," Fortis CEO Filip Dierckx said at a news conference in Brussels on Monday.

He declined to set a deadline for the ABN stake sale, and declined comment on a buyer. Belgian Finance Minister Didier Reynders has named ING Groep NV and BNP Paribas SA as interested.

Fortis said it expected to write down euro5 billion ($7.3 billion) worth of value destroyed in the third quarter, including eye-catching losses on its derivatives portfolio.

The company said that it has written down 78 percent of the value of the "collateralized debt obligations," or CDOs, it wrote itself. CDOs are packages of loans such as mortgages, bundled and sold like bonds.
The deterioration in the bank's portfolio is noteworthy, since few European banks have gone as far in revealing such woes, and analysts fear they will eventually have to do so.

Dierckx said he personally thought the CDOs were worth more, but conceded that this is their current market value.
Fortis' key misstep was participation in a three-bank consortium led by Royal Bank of Scotland PLC that acquired ABN Amro in a euro70 billion ($102.5 billion) deal that was the largest takeover in the history of the banking industry.

"If you look at some of the decisions that were taken in the past, then you can say that probably they were done at the wrong moment," Dierckx said.