Markets fall over eurozone division
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World markets have fallen over concerns that eurozone leaders are divided about how to tackle the debt crisis.
At 9.35, the FTSE 100 was down 1 per cent to stand at 5398.55, while the German Dax and the French Cac 40 were both down over 1 per cent in early trades.
The falls follow rumours that German chancellor Angela Merkel and French president Nicolas Sarkozy were both at odds over a rescue plan at a meeting in Frankfurt yesterday.
Markets also fell in Asia with Japan’s Nikkei 225 down over 1 per cent and Hong Kong Hang Seng down 1.8 per cent.
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Readers' comments (1)
Peter Herd | 20 Oct 2011 10:53 am
I read an interesting article yesterday regarding the horse trading that seems to be going on between governments and major banks. The argument centred around who pays for the recapitalisation of banks e.g. should banks be forced to sell assets to recapitalise their balance sheets rather than wait for state handouts.
It's an interesting debate because you could see that the movements in the stock market over recent months are closely linked to large players in the markets trying to force governments into a position where recapitalisation of banks is funded only by European taxpayers rather than these large organisations been forced into splitting up their large corporations.
It’s interesting debate particularly when you take a look at Lloyds and RBS as an example as the sum of the parts is properly worth more than the combined group and could even create more jobs in the long term. These groups are at present involved in drastic cost-cutting exercises and cutting large numbers of jobs in an attempt to save money. If these banks were forced to sell off parts of its business to create separate companies surely this would not only raise money for them to repair their balance sheets but would also create more employment and indeed provide the marketplace with greater competition which is desperately needed to stop these organisations manipulating and controlling prices within the market. Lloyds is a very good example as they now control over 40% of the mortgage market in the UK.
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