• 05 OCT 2011
By David Shand | Daily Express
SHARE prices plunged and Europe’s banking crisis deepened yesterday amid fears lenders will have to take bigger losses on Greek debt as the next tranche of rescue funding for Athens was delayed until mid-November.
Franco-Belgian bank Dexia, which has a big exposure to Greek debt, was heading for a break-up as French and Belgian governments were forced to guarantee the bank’s loans after its market value tumbled up to 40 per cent, while a profits warning from Deutsche Bank further spooked investors.
Investment banking giant Goldman Sachs added to the mood of pessimism as it cut its economic growth forecast for advanced economies for 2012 from 2.1 per cent to 1.3 per cent.
The FTSE 100 Index slumped 131.1 points to 4944.4, while continental markets also fell about 2.5 per cent.
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