European Banking Shares Crash On The Morning’s Trade

Shares in banks and lenders across Europe have suffered heavily over morning trade, as a result of the ongoing sub-prime crisis and the condition of UK lender Northern Rock.

The impact of the perceived spreading sub-prime crisis has led to investors selling shares in banks across most major European countries over the course of the morning, for fear that the problems could continue to get worse before they get any better.

Northern Rock announced today that several Spanish banks had also been required to seek emergency funding from the European Central Bank highlighting the wider nature of the problem, although it refused to disclose any details, and the ECB strongly denies the claim.

Additionally, banks across Italy and France suffered through the mornings trade as investors continued to offload shares in those with potential sub-prime exposure for fear of further liquidity problems in finance sectors.

Northern Rock shares again plummeted, down by almost 40% on the day to noon after heavier losses towards the end of last week. With the bank announcing it needed emergency cash on Friday, investors have been quick to get rid of any shares they may own in the bank to avoid suffering losses as a result.

In Spain, Bankinter had lost 6.2% by midday, whilst BNP Paribas was down on the CAC by around 3.7%. Societe Generale also lost under 3% of its share value by the early afternoon in Paris.

On the German DAX exchange, shares in Deutsche Bank, which had previously taken $500million in extra cash, fell by around 2.1% over the first half of trading, which by anyone’s standards is beyond regular trading.

Analysts are predicting that should banks continue to trade negatively throughout the course of the day, markets across Europe and potentially the US later on could be significantly hit.

Story link: European Banking Shares Crash On The Morning’s Trade