The European Commission has given the go ahead for a British government rescue plan for the UK mortgage-lender Bradford & Bingley saying it does meet EU state aid rules.
It is all part of the European efforts to limit the spread of the financial crisis. And amid all the gloom and fear some believe some good could come out of all this.
Business expert Fabrizio Petrucci explained: “The European banking system, and particularly that of the euro zone is much more solid than the system in the US, Britain and Switzerland. I believe that right now the euro zone banks have a great opportunity, not only to withstand this crisis but also to become world leaders. The problem it is that right now we don’t really know what the European banks have on their balance sheets.”
One bank which is benefiting is Spain’s Santander which is buying Bradford & Bingley’s deposits and branches. It has the resources to do that having largely escaped the financial crisis through a low-risk expansion policy.
By contrast, leading Italian bank Unicredit has just announced it is selling some of its property holdings to strengthen its finances after its shares lost nearly a quarter of their value in three days.
Unicredit’s Chief executive Alessandro Profumo – who is denying rumours that he is to stand down – this week stepped away from confirming the banks profit and earnings targets for this year.
The assets sale failed to calm investors and at one stage on Wednesday trading in the company’s shares had to be suspended for excessive losses.