PARIS, Aug 11, 2007 (AFP) – Newspapers worldwide fretted Saturday over the extent of the economic damage caused by contagion from US high-risk home loans after market turmoil spread across the globe. According to the paper, Bank of China and China Construction Bank, two of the country’s “big four” commercial banks, have said the crisis has affected them, and Bank of China said its losses could be several million US dollars. “Right now, the verdict seems in the balance,” Britain’s Financial Times wrote, saying the underlying economy remained in good shape.
It added: “Nevertheless, as long as investors remain so uncertain about who is now holding the current credit losses, fear will remain the dominant theme of the day.”
The world’s major stock markets faced volatility this week in response to the crisis involving US “subprime” loans — or high-risk home lending.
Central banks have responded by pumping tens of billions of euros (dollars) into the banking system, offering loans at lower rates to commercial banks to forestall a credit crunch that could damage economic growth.
France’s Le Figaro daily, along with other papers, welcomed interventions by the European Central Bank. The Fin