Tuesday, 27 January 2009
World markets are fairly flat in the day's trading, despite a raft of new corporate lay-off announcements. Meanwhile in Britain, Prime Minister Gordon Brown has been calling for tougher international regulations to avoid repeating the current global financial mistakes.
While most Asian markets were closed for a variety of national holidays, European exchanges made modest early gains led by the banking sector.
Barclays announced it expects pre-tax profits for 2008 to come in around $7.3 billion, despite $11 billion worth of write-downs.
Shares in the bank shot up on the disclosure. Just last week, Barclays shares nose-dived. The bank plans to push its full-year results forward by a week next month in an effort to allay market concerns.
British Prime Minister Gordon Brown has been talking about the need for coordinated global action to counter this worldwide recession. London will host an economic summit for the 20 most industrially-advanced nations in early April.
"While we can do a great deal nationally, we have to act internationally. If what happens to a bank in one country can within minutes bring potentially devastating effects on banks in a different continent, then only a truly international response in policy and in governance can be effective," said Mr. Brown. "And if we all coordinate our response then there will be a quicker global and British recovery."
Addressing the Foreign Press Association, Mr. Brown warned against an urge to retreat into protectionism.
He said new international financial regulations must come out of these economically tough times.
"We can view the threats and challenges we face today as the difficult birth-pangs of a new global order and our task now is nothing less than making the transition through a new internationalism to the benefits of an expanding global economy, not muddling through as pessimists, but making the necessary adjustment to a better future and setting new rules for this new global order," added Mr. Brown.
But the pain right now is very real.
Scores more lay-offs have been announced, including 7,000 at the Dutch banking giant ING. More than 700 jobs are going at the Ulster Bank, and steel-maker Corus is cutting 3,500 jobs worldwide, including 2,100 in Britain due to a large drop in demand.
By Tom Rivers
London
