LONDON - Just days after the US government brokered the sale of the nation's largest failed savings and loan, Washington Mutual, regulators in Britain and Belgium swooped in this weekend to engineer emergency rescues of two leading European banks with heavy exposure to soured mortgages.
The Dutch-Belgian bank and insurance giant Fortis NV was given a $16.4 billion lifeline to avert insolvency as part of a wider bailout plan agreed to by Belgium, the Netherlands and Luxembourg, officials said yesterday. Less than 200 miles away, British regulators were preparing to seize the troubled mortgage lender Bradford & Bingley after no private buyers emerged.
The collapse of several European banks, and the problems in the property and mortgage markets, have raised questions about whether Europe should come up with a shadow version of the bailout agreed to yesterday by American lawmakers of the hobbled financial system.
Europe and Japan rejected such a notion last week, although some economists say Europe may eventually be forced to take sweeping action. In Britain, Bradford's demise is expected to heighten pressure on the government of Prime Minister Gordon Brown to step in with its own plan to buy sickly mortgage securities from financial institutions, although Brown had said Britain would not pursue such a program. --more--"
That's what Paulson said.
