World stocks have tumbled after France’s biggest bank BNP Paribas became the latest to be hit by mortgage credit problems. BNP Paribas suspended withdrawals from three investment funds saying it could not value them accurately because of problems in the US subprime mortgage market. Other companies, including Union Investment Asset Management, a German mutual fund manager, and Frankfurt Trust, a unit of BHF-Bank, have also halted redemptions. Shortage of cash prompted the European Central Bank to take the highly unusual move of offering banks immediate and unlimited access to short-term cash at its 4 per cent lending rate. The recent collapse of American Home Mortgage, the 10th largest lender in the US, intensified concerns that housing woes could drag down the economy as a whole.
US stocks slide as mortgage concerns go global