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VOL. 123 | NO. 201 | Tuesday, October 14, 2008

A Look at Financial Developments Around the World

By The Associated Press

Print | Front Page | Email this story | Comments ()

A look at what happened in some stock markets around the world Monday:

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EUROPE (AP) – European governments overcame their differences to put 1.7 trillion euros ($2.3 trillion) on the line in guarantees and other emergency measures to save the banking system, in their most unified response yet to the global financial crisis. The pledges by six countries that use the euro and Britain helped soothe stock markets, along with a promise by top central banks to provide unlimited short term dollar credits.

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GERMANY (AP) – The German government assembled a rescue package worth as much as 500 billion euros ($671 billion) to shore up the country's financial system – part of a coordinated European bailout effort. Finance Ministry spokesman Torsten Albig put the total figure at 500 billion euros. His ministry said the package foresees up to 400 billion euros ($536.7 billion) in guarantees for banks. At the close, Germany's DAX was 518.14 points, or 11.4 percent, higher at 5,062.45.

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FRANCE (AP) – French President Nicolas Sarkozy said his government will provide up to 360 billion euros ($491 billion) to help banks stay afloat through the financial crisis – 320 billion euros ($436 billion) to guarantee bank refinancing and another 40 billion euros ($54 billion) for a government-backed agency to provide banks with extra capital. He said the figure is a maximum, which may not be reached if the market starts functioning normally again. France's CAC-40 rose 355.01 points, or 11.2 percent, to close at 3,531.50.

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BRITAIN (AP) – The British government injected $63 billion into some of the country's leading banks to avoid a full-scale collapse of the sector. In return for the rescue, the Royal Bank of Scotland Group PLC, Lloyds TSB Group PLC and HBOS PLC will cede major stakes to the government and halt cash bonuses for bank board members this year. The banks also will be required to lend more money to small- and medium-size businesses and homeowners in a bid to rescue the country's housing market. Britain's FTSE 100 was 324.84 points, or 8.3 percent, higher at 4,256.90.

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ITALY (AP) – The Italian government has said it would put "as much as necessary" toward a rescue package to shore up the country's financial system. Finance Minister Giulio Tremonti said Italy was not earmarking a specific amount as other countries announcing similar measures, and it also did not announce a cap.

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NETHERLANDS (AP) – Prime Minister Jan Peter Balkenende said the Netherlands will guarantee 200 billion euros ($272.78 billion) in loans between banks to help ease the financial crisis.

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SPAIN (AP) – Spain said it would guarantee up to 100 billion euros ($135 billion) in a bank bond issuance this year. The measure would guarantee credit operations by Spanish banks to the end of this year. Foreign banks "with significant operations in Spain" are also to be covered.

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PORTUGAL (AP) – Portugal guaranteed 20 billion euros ($27 billion) – nearly 12 percent of annual GDP – to encourage Portuguese banks to lend to each other.

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AUSTRIA (AP) – Austria's government says it's prepared to prop up troubled banks with up to 85 billion euros ($114 billion) in guarantees, if they need it to survive the global financial crisis. Chancellor Alfred Gusenbauer says his government is also ready to provide an additional 15 billion euros ($20 billion) in capital.

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RUSSIA (AP) – Russian stock benchmarks dropped sharply on declining world oil prices and new struggles for control of the world's largest nickel miner, prompting trading suspensions on the country's two exchanges. The ruble-denominated MICEX index closed 4.8 percent lower at 666.4 points in Monday's session, with a one-hour suspension after its technical index – the composite of all stocks – fell more than 5 percent.

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HUNGARY (AP) – Hungary may become the first European Union nation to seek loans from the International Monetary Fund after the Washington-based fund said it stood ready to offer financial assistance. The IMF said it was in close talks with the Hungarian government and EU officials on how Budapest could cope with the "stress experienced over recent days" on the market for Hungarian state securities.

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ICELAND (AP) – Iceland has suspended trading on its stock exchange for the third consecutive trading day, citing "unusual market conditions." Monday's decision follows a turbulent week in Iceland, where the government has taken control of the country's three major banks. Nasdaq OMX Iceland says trading will resume on Tuesday. The exchange's fixed income market remains open.

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SOUTH KOREA (AP) – South Korean shares rose sharply following last week's steep declines amid the global financial crisis. The Korea Composite Stock Price Index gained 3.8 percent to close at 1,288.53. At one point, the Kospi had risen as much as 4.1 percent. The gain came after the benchmark index fell 12.6 percent last week as world markets plunged amid the global financial crisis.

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HONG KONG (AP) – Hong Kong's stock market staged a huge rally Monday after last week's sell-off as governments from Europe to Australia moved to shore up the global financial system. The blue-chip Hang Seng Index shot up 1,515.29 points, or 10.2 percent, to finish at 16,312.16. The benchmark tumbled more than 7 percent Friday to close below the 15,000 level for the first time since January 2006.

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CHINA (AP) – Chinese stocks recovered from early losses Monday in what analysts said was a buying spree by state-owned financial institutions. The benchmark Shanghai Composite Index gained 3.7 percent, or 73.00 points, to 2,073.57. It had dropped 3.4 percent by midday in volatile trading. The Shenzhen Composite Index added 1.9 percent to 541.32.

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CHILE (AP) – The Chilean government says it is allocating $850 million for credits to help exporters and small businesses to face the international financial crisis. Finance Minister Andres Velasco says the government will also auction $700 million in treasury funds to local banks to strengthen liquidity.

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 0 133 1,342
MORTGAGES 0 131 1,047
FORECLOSURE NOTICES 20 39 190
BUILDING PERMITS 0 305 3,056
BANKRUPTCIES 17 135 753
BUSINESS LICENSES 0 53 329
UTILITY CONNECTIONS 0 0 0
MARRIAGE LICENSES 0 0 0