All eyes on G7 as markets take fright
The world’s economic powers faced huge pressure on Friday to contain the financial crisis as panic selling swept through European and Asian markets amid growing fears of a global economic recession.
With financial policy makers from the Group of Seven (G7) major industrial nations due to meet later in Washington, bank bailouts, liquidity injections and coordinated interest rate cuts across the world have failed to quell investor fears.
In a bid to unfreeze bank lending and staunch massive losses in equity markets, the U.S. government is weighing guaranteeing billions of dollars in bank debt and temporarily insuring all U.S. bank deposits, The Wall Street Journal reported.
European shares traded down nine percent within minutes of the opening, having already lost more than 15 percent in the four days to Thursday’s close faxless payday loan guaranteed.
Japan’s Nikkei tumbled nearly 10 percent, registering its biggest one-day drop since a 1987 crash and losing nearly a quarter of its value in a week.
The global crisis also claimed its first Japanese financial institution — unlisted Yamato Life Insurance Co., which had $2.7 billion debts and the government looked to prop up smaller banks.
Focus was on the G7 meeting, which is under increasing pressure to come up with something new to save the global financial system.
“Politicians must be scared by now, looking at stock markets and the problems in the credit markets,” said Dariusz Kowalczyk, chief investment strategist at CFC Seymour Ltd in Hong Kong.
Filed under: money by Fred