The idea that the rest of the world can "decouple" itself from the slowdown affecting the United States is unrealistic, the head of president George W Bush's economic advisory team said today, The Guardian reports.
Ed Lazear, chairman of the Council of Economic Advisers, said that the idea of decoupling would only be realistic if the US's share of the world economy had fallen and if international trade flows dried up.
But, he said, the giant US economy still accounts for 30% of the world total and trade flows have increased in recent years.
THE GOVERNMENT COULD be forced to approve a more radical and rapid downsizing of Northern Rock if it is to win European Commission approval for its bailout of the mortgage lender, it emerged today, also according to The Guardian.
The commission could also force ministers to cut short the duration of the multi-billion guarantees and loans offered to the nationalised bank, forcing it to survive on its own two feet before 2011-12 — and to pay more for the facilities.
Serious doubts about the compatibility of the government's rescue package with EC treaty rules on state restructuring aid are set out in the EU's official journal.
CREDIT AGRICOLE, ONE of France's largest banking groups, will this week launch a discounted rights issue to raise €5.9bn (£4.66bn), as it becomes the latest European bank to turn to its shareholders for cash, following the onset of the credit crunch, The Independent reports.
The bank issued a statement yesterday setting the terms of the issue at €15.3 a share on an ex-rights basis, which works out at a 31 per cent discount. The offer period starts on Friday and runs for just under three weeks.
The group said the size of the capital raising was dictated by its need to shore up its cash base "considering the uncertainty and the risks relating to the economic environment and the market".IFAonline
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