The prospect of a banking failure in the US was raised yesterday by the Federal Reserve chairman, Ben Bernanke, as the dollar plunged to a record low against the euro and gold surged to an all-time high, The Guardian reports.
On the second day of his biannual testimony to Congress, Bernanke said some small US banks were likely to go under from the effects of the credit crunch and soaring mortgage delinquencies.
"I expect there will be some failures," he said. "I don't anticipate any serious problems of that sort among the large internationally active banks that make up a very substantial part of our banking system."
HOUSE PRICES CONTINUED THEIR DOWNWARD trend in February for the fourth month running, the UK's largest building society said today, but insisted that recession was still a "remote risk" for the UK economy, The Times reports.
Nationwide said the 0.5% February fall means house price inflation is now running at just 2.7%, the lowest annual growth rate since November 2005. Eight months ago it was running at 11.1% and at 4.2% in January.
This is the first time since 2000 that house prices have fallen for four months in a row. But despite the slide, the average home in the UK is still worth £179,358 having gained around £12.75 a day during the past year.
SIR FRED GOODWIN HIT BACK YESTERDAY at analysts who accused Royal Bank of Scotland of having a capital shortfall as his bank announced a rise in profits and a dividend increase, despite bigger write-downs from the credit crisis, The Independent reports.
The RBS chief executive also defended its acquisition of ABN Amro and said increased gains from the deal would help rebuild the bank's capital ratios faster than expected.
Annual operating profits at Britain's second biggest bank rose by 9% to £10.3bn and its full-year dividend was up by 10% to 33.2p.
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