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Shares slump as rescue bid fails Shares slump as rescue bid fails
(19 minutes later)
US and European shares have tumbled after the $700bn (£380bn) bail-out looked set to fail and amid news from the troubled banking sector.US and European shares have tumbled after the $700bn (£380bn) bail-out looked set to fail and amid news from the troubled banking sector.
Wall Street shares fell more than 5% after Congress surprised observers by not backing the rescue plan - the Dow Jones at one point losing 600 points.Wall Street shares fell more than 5% after Congress surprised observers by not backing the rescue plan - the Dow Jones at one point losing 600 points.
London's key index lost 5.3% - its biggest one-day drop since January.London's key index lost 5.3% - its biggest one-day drop since January.
Confidence had been smashed by the forced rescue of US bank Wachovia and Bradford and Bingley's nationalisation.Confidence had been smashed by the forced rescue of US bank Wachovia and Bradford and Bingley's nationalisation.
The fall on the FTSE 100 was its biggest one-day drop since January, with France and Germany seeing similar falls while Wall Street also slid.The fall on the FTSE 100 was its biggest one-day drop since January, with France and Germany seeing similar falls while Wall Street also slid.
The Dow Jones index was 450 points (4%) lower at 10,690 as the result emerged. The tech-heavy Nasdaq lost 5.9% The Dow Jones index was 450 points (4%) lower at 10,690 as the result emerged - throwing efforts to calm the US financial crisis into disarray. The tech-heavy Nasdaq lost 5.9%.
Dramatic eventsDramatic events
The market moves came on another eventful day of global financial turmoil, which BBC Business Editor Robert Peston described as the "worst" since the credit crunch began.The market moves came on another eventful day of global financial turmoil, which BBC Business Editor Robert Peston described as the "worst" since the credit crunch began.
Developments include:
  • UK buy-to-let specialist Bradford and Bingley being nationalised with the government taking control of B&B's mortgages and loans, while its savings arms is being bought by Abbey.
Developments include:
  • UK buy-to-let specialist Bradford and Bingley being nationalised with the government taking control of B&B's mortgages and loans, while its savings arms is being bought by Abbey.
  • Wachovia, the fourth-largest US bank, was bought by larger rival Citigroup in a rescue deal backed by US authorities
  • Benelux banking giant Fortis was partially nationalised by the Dutch, Belgian and Luxembourg governments to ensure its survival
  • The Icelandic government took control of the country's third-largest bank, Glitnir, after the company had faced short-term funding problems
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  • Central banks gave a massive liquidity injection to try to ease the credit squeeze
>B&B nationalised
  • Wachovia, the fourth-largest US bank, was bought by larger rival Citigroup in a rescue deal backed by US authorities
    • Citigroup to buy Wachovia
  • Benelux banking giant Fortis was partially nationalised by the Dutch, Belgian and Luxembourg governments to ensure its survival
    • Fortis deal agreed
  • The Icelandic government took control of the country's third-largest bank, Glitnir, after the company had faced short-term funding problems
    • Central banks gave a massive liquidity injection to try to ease the credit squeeze
    London's FTSE 100 index closed at 4,818.77 points - with several banking shares losing more than 10% of their value.London's FTSE 100 index closed at 4,818.77 points - with several banking shares losing more than 10% of their value.
    In the US, the Dow Jones was down 2.3% while the tech-heavy Nasdaq slipped 4.8%.In the US, the Dow Jones was down 2.3% while the tech-heavy Nasdaq slipped 4.8%.
    Germany's Dax index closed 4.2% lower while France's Cac 40 slid 5%.Germany's Dax index closed 4.2% lower while France's Cac 40 slid 5%.
    "There is a contagious effect," said Darren Winder, head of macro and strategy research at Cazenove."There is a contagious effect," said Darren Winder, head of macro and strategy research at Cazenove.
    "The implications of a fallout from (the credit crunch) are far-reaching, there are dozens of quoted banks in Europe, so it would seem unlikely that they would all be unaffected by this.""The implications of a fallout from (the credit crunch) are far-reaching, there are dozens of quoted banks in Europe, so it would seem unlikely that they would all be unaffected by this."
    The lack of support of the lower house of the US Congress for the plan to bail out Wall Street came after President Bush urged the House of Representatives to pass it.The lack of support of the lower house of the US Congress for the plan to bail out Wall Street came after President Bush urged the House of Representatives to pass it.
    The bill is designed to end the credit crunch - and send a strong signal to the markets.The bill is designed to end the credit crunch - and send a strong signal to the markets.
    President Bush said: "I'm confident that this rescue plan, along with other measures taken by the Treasury Department and the Federal Reserve, will begin to restore strength and stability to America's financial system and overall economy."President Bush said: "I'm confident that this rescue plan, along with other measures taken by the Treasury Department and the Federal Reserve, will begin to restore strength and stability to America's financial system and overall economy."
    Analysts said that the market downturn was not surprising after the latest fall-out from the banking sector.Analysts said that the market downturn was not surprising after the latest fall-out from the banking sector.