World financial crisis

Asian and European markets close up as financial injections continue

Article published on the 2008-10-20 Latest update 2008-10-20 18:02 TU

A trader looks at trading board at a Saudi Bank in Riyadh
(Photo: Reuters)

In the United States, the Chairman of the Federal Reserve, Ben Bernanke on Monday approved the suggestion of a new US plan to stimulate the economy. Markets were optimistic on Monday and at close of trading, Asian exchanges were up (Tokyo + 3.59%, Hong Kong + 5.3% and Singapore + 3.2%). European markets also closed up (London +5.41% and Paris +2.48%) and New York was + 1.44% in the afternoon.

The exception was in Kuwait where stocks fell to a 19-month low although other markets in the Gulf rose.

In France, Prime Minister François Fillon said French banks had committed to increasing their annual loans by three to four per cent and Finance Minister Christine Lagarde admitted that economic growth in France was unlikely to reach one per cent next year. 

Germany's government said that its rescue package for German banks would be limited to ten billion euros per bank while other European governments gave details of their rescue plans.

Sweden unveiled a rescue package worth over 150 billion euros while Iceland was reported to be preparing a 4.5 billion euro rescue plan sponsored by the IMF. Finland's government also announced a rescue package for its finance sector - worth 54 billion euros.

The knock-on effects of the financial crisis were also in the news on Monday as the head of International Labour Organization, Juan Somavia, warned of a possible increase of 20 million people unemployed.

Economic growth in China has slowed down in the third quarter of the year. It is now at nine per cent. In Japan the country's Central Bank said the country's economy would remain stagnant for some time.