Fear of bank collapse hits the euro zone

[Doctor Cynic]

Source: Globe and Mail

ROME — Europe is on tenterhooks.

Only a few weeks ago, there was a sense of optimism in the euro zone. Yes, the economy was cracking, but the worst seemed to be over. Oil prices were down, wage settlements were up. Apart from Spain, Ireland and Britain, which is not a euro zone member, property prices were holding their own.

Then came the Wall Street disaster, and pessimism returned with a bang. Europeans had assumed they would be largely immune to the American financial crisis. Not any more. Economists now expect another quarter or two of negative growth. They say interest rate cuts – the European Central Bank (ECB) raised rates in July – and economic stimulus packages are all but certain.

Economic recovery, in other words, has been put on hold. And there's a potential monster stalking the euro zone: fear of a bank collapse.

Read more: http://www.reportonbusiness.com/servlet/story/RTGAM.20080925.wrbankseurope26/BNStory/Business/home

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This Christmas the whole world will be united at long lines at banks...

[muriel_volestrangler]

1. Fortis Declines After Report Dutch Clients Are Moving

Sept. 26 (Bloomberg) -- Fortis fell as much as 15 percent in Brussels trading after De Telegraaf reported that clients of Dutch unit ABN Amro Holding NV may be moving to other banks.

Fortis was down 54 cents, or 8.3 percent, to 5.99 euros by 11:07 a.m., extending yesterday's decline of 6.3 percent and valuing the bank at 14.1 billion euros ($20.5 billion). Fortis management will address television and radio reporters today in reaction to market events, spokeswoman Liliane Tackaert said.

``We will not be issuing any statement,'' she said. ``It is not major news.''

Fortis agreed to acquire the Dutch consumer banking operations of ABN Amro last year, though the banks still operate separately. Jan Peter Schmittman, head of ABN Amro Netherlands, told De Telegraaf that questions about Fortis's liquidity have led some ABN Amro clients to defect. He said there is no need for customers to be concerned about ABN Amro's liquidity or solvency.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aL4a7BwHO1yw&refer=home

Fortis is the 14th largest company in the world, by revenue - bigger than any American bank (biggest is Citigroup, which is 16th).

[CountAllVotes]

2. sadly ...

they do not have currency in Holland anymore. They don't write checks either. It is all on the debit card now.

:kick:

[carla]

3. We still have currency...

here in the Netherlands, it's called the euro. I use it everyday and I also have a debit card, which I use to get cash out of the wall. Most payments at stores are done with cards, while banking is almost entirely Internet.