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Shares slide amid bail-out fears Shares slide amid bail-out fears
(about 3 hours later)
European shares have fallen, following sharp drops in Asia, amid wrangling in the US over the massive $700bn financial bail-out plan. Share prices in Europe and Asia have fallen with investors nervous about wrangling in the US over the massive $700bn financial bail-out plan.
Doubts over how soon the rescue plan can be applied have emerged from both the Democrats and Republicans.Doubts over how soon the rescue plan can be applied have emerged from both the Democrats and Republicans.
London's FTSE 100 fell 2.2%, while the Cac 40 in Paris slid 1.9% and Frankfurt's Dax shed 1%. Hong Kong's HSI ended nearly 4% lower. London's FTSE 100 fell 2.5%, the Cac 40 in Paris slid 1.9% and Frankfurt's Dax was down 1%. Hong Kong's Hang Seng index ended nearly 4% lower.
On Monday, US shares fell sharply, with the Dow Jones index closing down 3.3%.On Monday, US shares fell sharply, with the Dow Jones index closing down 3.3%.
Banks were among the main fallers in morning trade in Europe with Deutsche Bank and Royal Bank of Scotland both shedding more than 5% and Swiss firm UBS down 4.2%. Banks were among the main fallers with Deutsche Bank shares falling 3.5%, Royal Bank of Scotland 3.1% lower and Swiss firm UBS down 2%.
While the bail-out package was welcome when it was made official last week, there are concerns about how the $700bn plan will come into effect in practice. Markets are waiting to hear comments from Federal Reserve head Ben Bernanke and US Treasury Secretary Henry Paulson when they speak before the Senate Banking Committee later.
Until Lehman brothers collapsed, Japanese financial institutions were pretty confident BBC's Chris Hogg in Tokyo Global reaction to financial turmoil
The bail-out package was welcome when it was made official last week, but there are concerns about how the $700bn plan will come be implemented and whether it will mark a precedent.
The White House says Congress must back the rescue plan to stop wider economic harm.The White House says Congress must back the rescue plan to stop wider economic harm.
The Government of Singapore Investment Corporation (GIC), a sovereign wealth fund that has acquired shares in UBS and Citigroup, expressed concerns over the risks of stalling the rescue plan.The Government of Singapore Investment Corporation (GIC), a sovereign wealth fund that has acquired shares in UBS and Citigroup, expressed concerns over the risks of stalling the rescue plan.
And ongoing nerves about the financial sector continue globally, after markets saw sharp volatility last week in the wake of upheaval among banks. Dissent
Many politicians appear alarmed by the scale and implications of the global financial crisis.
Until Lehman brothers collapsed, Japanese financial institutions were pretty confident BBC's Chris Hogg in Tokyo Global reaction to financial turmoil
Oil surge
While most US politicians are anxious to find bi-partisan ways to back the bail-out, others criticise what they see as a waste of taxpayers' money, correspondents say.
In the US on Monday, the Dow Jones index closed 372.75 points, or 3.3% lower, at 11,015.6, wiping out the gains made during Friday's rally.In the US on Monday, the Dow Jones index closed 372.75 points, or 3.3% lower, at 11,015.6, wiping out the gains made during Friday's rally.
Banking shares were particularly hard hit, as many investors switched to commodities such as oil and gold. Oil recorded its largest-ever one-day gain on Monday. Banking shares were particularly hard hit, as many investors switched to commodities such as oil and gold. Oil recorded its largest one-day gain in history on Monday.
The share falls came as US lawmakers held talks with the administration on the proposed bail-out.
It allows Treasury Secretary Henry Paulson to set up a fund to buy back much of the bad debt held by US banks and financial institutions.
With the immediate sense of imminent collapse now passing, dissenting voices are beginning to emerge, says the BBC's Kevin Connolly in Washington.
Contentious issues include limiting compensation for executives of rescued firms, wider help for American homeowners at risk of losing their homes and demands for oversight.
"The Bush Administration has called on Congress to rubber stamp its bail-out legislation without serious debate or efforts to improve it," said US Senate Majority Leader Harry Reid. "That will not happen," he said.
HAVE YOUR SAYWhy do the world's governments insist on bailing out failing banks with our money?Frustrated, CardiffSend us your commentsHAVE YOUR SAYWhy do the world's governments insist on bailing out failing banks with our money?Frustrated, CardiffSend us your comments
US lawmakers have been holding talks with the administration on the proposed bail-out.
The plan allows Treasury Secretary Henry Paulson to set up a fund to buy back much of the bad debt held by US banks and financial institutions.
But with the immediate sense of imminent collapse now passing, dissenting voices are beginning to emerge, says the BBC's Kevin Connolly in Washington.
Contentious issues include limiting compensation for executives of rescued firms, wider help for US homeowners at risk of losing their homes and demands for oversight.
"The Bush Administration has called on Congress to rubber stamp its bail-out legislation without serious debate or efforts to improve it," said US Senate Majority Leader Harry Reid. "That will not happen," he said.
Richard Shelby, a senior republican on the Senate Banking Committee, also hit out at the plan.Richard Shelby, a senior republican on the Senate Banking Committee, also hit out at the plan.
"It would be foolish to waste massive sums of taxpayer funds testing an idea that has been hastily crafted," he said."It would be foolish to waste massive sums of taxpayer funds testing an idea that has been hastily crafted," he said.
President George W Bush has warned that "failure to act would have broad consequences".
Both Mr Paulson and Federal Reserve Board Chairman Ben Bernanke are scheduled to testify before the Senate Banking Committee on Tuesday.
Will the $700bn package stabilise the economy? Are you in the US? How do you think the money should be best spent?Will the $700bn package stabilise the economy? Are you in the US? How do you think the money should be best spent?
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