News

An emergency plan to pump billions of pounds of taxpayers' cash into Britain's banks emerged yesterday as the global financial crisis deepened.

German Chancellor Angela Merkel buried any remaining semblance of a unified European response by guaranteeing individuals' deposits in an effort to avert a crisis of confidence in the nation's banks. Alistair Darling hinted yesterday that the Government could use public funds to take stakes in many if not all of Britain's banks to help to restore the system, writes the Times.

Business leaders have stepped up pressure on the Monetary Policy Committee for a half percentage point cut in interest rates. David Kern, economic adviser to the British Chambers of Commerce, said the UK was facing "a potential emergency". "To reduce the threat of a major recession," Mr Kern said, "the MPC must cut interest rates to 4.5pc next week, and continue cutting rates to at least 4pc over the following three to four months," reports the Telegraph.

The Tories have hit back at British Airways' chief executive Willie Walsh and accused him of "spinning the figures" over the number of Heathrow flights that could be displaced by high-speed rail links. Shadow transport secretary Theresa Villiers, accused both Mr Walsh and the Government of trying to play down the impact of high-speed rail lines to bludgeon through the runway project, writes the Telegraph.

Canary Wharf Group is pushing forward with expansion plans, in spite of the impact of the credit crunch on investment banks, the group's main source of tenants. The group is confident that it will secure JPMorgan Chase as a key tenant for a new phase of the Docklands financial district by the end of the year, George Iacobescu, its chief executive, said, according to the Times.

The battle for control of Wachovia has taken a dramatic turn after Citigroup succeeded in temporarily blocking Wells Fargo's $15.4bn (£8.7bn) takeover of the North Carolina-based bank. Citigroup said it had been granted "emergency injunctive relief" from the Supreme Court of the State of New York to extend the exclusivity agreement governing its $2.1bn takeover bid, according to the Telegraph.

BNP Paribas, the French bank, will take control of the remaining assets of Fortis after the Belgian government was forced to find a buyer following the shock Dutch nationalisation of its part of the troubled banking and insurance group.The all-share deal, announced on Sunday night by the Belgian government, is set to make BNP the biggest bank in the eurozone by deposits and will over time make Belgium and Luxembourg shareholders in the French bank, reports the Financial Times.

A large number of UK retailers could go bust in the new year, according to the country's largest corporate insolvency specialist. Begbies Traynor said banks were likely to support retailers until the Christmas period but a spate of insolvencies was likely to follow in the new year. The insolvency specialist has 323 UK retailers on its "critical watch list", writes the Financial Times.

One of Italy's largest banks outlined its plans for survival last night as UniCredit said that it was seeking up to €6.6 billion in fresh funds. The bank, Italy's second-largest with operations throughout mainland and Eastern Europe, announced a scheme to sell 973 million shares at €3.083 a share, writes the Times.

Germany's government and financial regulators on Sunday agreed a second bail-out package for Hypo Real Estate after the abrupt failure of a first attempt to rescue the property lender, reports the Financial Times.