BANKS AGAIN DOMINATING NEWS AGENDA - The big banking stories are again dominating the news agenda at the start of week three of this unprecedented stream of banking collapses and rescues. The US's sixth biggest bank Wachovia - which had been seen as a white knight rescuer for Washington Mutual only last week - is this week looking to find a merger partner. Bradford and Bingley, the mortgage book of UK buy-to-let lender has been nationalised and bang in the middle of the euro zone, Fortis Bank was part nationalised at the weekend.
Justin Urquhart-Stewart, of Seven Investment Management, says that Bradford and Bingley is following the same route as Northern Rock, nationalised earlier this year. The authorities were concerned the effect on the rest of the banking industry in the UK if they did not nationalise B&B, he says. But he points out that the rescue is again using tax payers money, creating a lot of anger. He says the anger is similar to that in the US after news of the government's $700 billion bailout package. He says this is the same value as the entire Dutch economy.
James Forbes, of Irish Life Investment Managers, says that the important thing about the US plan is that it is focused on the American banks. In terms of practical implications for the Irish and European banks, he says it will not have any dramatic impact. However, the plan - which had to be passed - will stabilise the US banking system and that is what is needed for the global economy at the moment. He says the banking industry needs to get some confidence back into its veins.
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MORNING BRIEFS - Germany's second biggest commercial bank, Hypo Real Estate, has been given a multibillion credit line from a consortium of German banks, which has allowed to avoid it declaring bankruptcy.
*** The euro is trading at $1.44 and 79.14 pence sterling on the currency markets this morning.
