Greed and a Trillion Dollar Meltdown ; As Natwest-Owners Rbs Today Announced Disastrous Results, Including a [Pounds]5.9bn Write-Off, We Tell What has Fuelled the Biggest Downturn to Hit London and the Financial World for a Generation

Summary

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A YEAR ago tomorrow, a French bank, BNP-Paribas, announced that two of its funds that were holding large amounts of American low- income mortgages had suffered huge losses. The financial markets got the jitters and a panicked European Central Bank and the US Federal Reserve injected [pounds]45 billion to try and maintain calm. The credit crunch had begun.

Twelve months on and Royal Bank of Scotland today announces a thumping writedown of [pounds]5.9 billion and a pre-tax loss of [pounds]691 million. This follows a week of plunging profits and writedowns from its rival British banks. In between, two major banks, Northern Rock here and Bear Stearns in the US, have collapsed and thousands of bankers have lost their jobs. There's talk in the City of as much as $500 billion having to be written-off.

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Extract

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Greed and a Trillion Dollar Meltdown ; As Natwest-Owners Rbs Today Announced Disastrous Results, Including a [Pounds]5.9bn Write-Off, We Tell What has Fuelled the Biggest Downturn to Hit London and the Financial World for a Generation

The numbers and the scale of the disaster that has engulfed the financial world are simply mind-numbing. On this side of the Atlantic, it is difficult to gauge what has occurred. Our losses, even allowing for RBS's shocker, have been squalls compared with some of the blows inflicted upon the major US banks.

We've seen Northern Rock having to be rescued and we've been treated to regular doses of bad news from other banks but this is one of those occasions when we're forced to step back from America and gulp. It's rather like watching tonight's opening ceremony in B...

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