Eurozone bank bailouts continue

The leaders of the Eurozone put together packages to bail out another two banks yesterday following on from the €4bn rescue of the bankrupt Belgian lender Dexia.  Eurozone bank bailouts continueDenmark’s Max Bank and Greece’s Proton Bank both sought government aid to avoid collapse after the bailout of Dexia which saw Belgium, Luxembourg and France agree to guarantee losses of up to €90bn.

Max Bank will see its toxic assets guaranteed by the Danish government while Proton Banks losses will be underwritten by part of Greece’s new €30bn bailout fund.

UK Chancellor George Osborne called on Eurozone countries to accelerate the pace of bailouts and to “set out the backstops they have in place to raise capital or provide public capital if they cannot”.

He also boosted that the coalition had reduced the bailout guarantee enjoyed by Britain’s banks claiming “This is the direction policy should be moving in” and repeated his call for the Eurozone to “move towards greater fiscal integration to underpin the single currency”.

The move by the Eurozone ministers to shore up the banks drove the Euro on as it strengthened against its major rivals.

Traders will wait for more news on further bailouts before deciding whether the Euro will strengthen further or whether this is a temporary move if the bailout amounts increase significantly.

The US Dollar weakened off against most of the other currencies as investors moved money out of the Greenback into so called “riskier” currencies.

This morning brought UK figures in the shape of Industrial Production which was as expected at 0.2% while Manufacturing Productions came in worse at -0.3% showing the UK continues to struggle in the current climate.

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