Europe's Race To The Bottom

[seemslikeadream]

http://www.forbes.com/markets/2008/10/07/briefing-europe-update-markets-equity-cx_ll_je_1007markets.html

LONDON - Europe traded flat by Tuesday's close after it emerged that Icelandic bank Landsbanki went into receivership and dismissed its board. Worries over the state of the British banking system and the euro zone economy also added to the negative equity trading.

Britain's FTSE 100 rose 0.5%, while France's CAC-40 rose 0.4% and Germany's DAX fell 0.8%. European stocks had initially opened higher on Tuesday morning after a day of bloody losses on Monday.

Iceland's commerce and banking minister Bjorgvin Sigurdsson was quoted by Reuters as saying in a radio address Monday morning that the move on Landsbanki was made in cooperation with the lender, and that Landsbanki would be open and run as normal while the changes were taking place. Sigurdsson said Iceland's Financial Supervisory Authority had put its own people in place of the bank's board.

A source at fellow Icelandic bank Kaupthing told Forbes.com that there was no indication of any government intervention at that bank.

Late Monday, Iceland's government announced new powers allowing it to take control of its battered banks as its financial system tottered and its currency plunged. (See "Cold Wind Blows Across Iceland's Banks.")