FTSE plummets amid another eventful weekend

It has been yet another weekend full of news in the banking sector which has sent shares in London and Europe crashing.

Meltdown Monday saw the FTSE 100 index down by over 6% by mid-morning to 4675 - a fall of 304.6 points. Banks including HBOS fell 32p, while RBS lost 26p.

Across the Atlantic, the US $700 billion (£380 billion) bailout plan was finally approved late on Friday night, but quite how effective the package is on everyone’s mind.

In the euro zone, German Chancellor Angela Merkel has announced it is to guarantee all retail savings deposits. However, the announcement rocked its fellow European nations after French President Sarkozy is seeking the support of European leaders for a €300 billion (£237 billion) bailout fund to rescue struggling banks throughout Europe.

The move from Germany came after one of the country’s largest lenders, Hypo Real Estate, struggled to stay afloat.

In the meantime, Icesave, an arm of Landsbanki, the Icelandic bank, has experienced a glitch on its website.

According to The Times, savers were unable to withdraw money online but were allowed to view their accounts. The Icesave website said it had been experiencing problems over the last 12 hours but the matter has now been resolved.

The news of Icesave comes as the country has announced a financial package in a bid to boost its struggling banking sector.

Geir Haarde, Iceland’s Prime Minister, said the country’s biggest banks have agreed to sell off some of their overseas assets and bring them back to Iceland. As well as boosting the economy, it is hoped that the move will prevent the Icelandic currency, the krona, from falling any further.

Last week, it was announced that Iceland’s third largest bank, Glitnir, was nationalised after it faced short-term funding problems. It was the first bank in the country to be nationalised since the start of the credit crunch.

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