Global financial crisis: what next?

by Catherine Woods - Thursday, 9th October 2008 - - Business comment

I received a text from an investment banker friend this morning who, it has to be said, is master of the understatement.

“It has been an interesting week,” he wrote. “Every week seems to get more and more interesting.”

Too bloody right.

Each morning we’ve turned up to work wondering what unthinkable act will happen next.

So far we’ve seen Alistair Darling produce an audacious bank rescue plan (apparently devised over a curry) that sees the taxpayer holding a major stake in eight British banks.

The Bank of England and a group of the world’s other central banks have cut interest rates.

And Iceland’s banking system has been brought to its knees. Today, we’ve heard that Kaupthing has become the third Icelandic bank to be nationalised along with Landsbanki and Glitnir. The artic country's financial crisis has affected big fish and small fry alike.

UK-based property entrepreneur Robert Tchenguiz has reportedly lost £1bn after being forced to sell large stakes in British companies such as J Sainsbury and Mitchells & Butlers. The FT says that's because Kaupthing's UK investment bank was his financial backer.

At the other end of the scale, I have a friend who’s not sleeping because her life savings are tied up in IceSave, which is connected to Landsbanki. Gordon Brown has promised he’ll get her money back somehow, but that’s cold comfort for someone who did extensive due diligence on where she was going to plonk her cash and now can't access it.

And so we wait and watch to see what’s going to happen next.

Markets have reacted positively to yesterday’s global interest rates cut, according to the Times

But regardless, it seems that a recession is now unavoidable.

Has the financial crisis impacted on your business? Are you stressed about your savings? What does all of this mean to you? Let us know.