Finance and Economic

U.S. lawmakers prepared to vote on Monday on a $700 billion fund to buy toxic debt as the global financial crisis produced Europe’s biggest bank rescue to date.

Investors around the world hung on every twist and turn in Washington as Benelux governments moved to part-nationalise

Belgian-Dutch group Fortis.

In Britain, mortgage lender Bradford & Bingley became the second British bank to be taken under the government’s wing since the crisis began last year. Shares in French bank Dexia tumbled more than 20 percent on a

newspaper report that it might launch an emergency capital increase.

Fortis is the first major euro zone bank to buckle under the financial turmoil triggered in August last year by U.S credit reports. mortgage defaults, and an early relief rally in markets at news of progress in Washington soon fizzled out.

Stock markets in Japan, South Korea and Hong Kong all retreated 1-2 percent, giving up initial gains led by financial shares. U.S. stock futures pointed to a drop at the opening bell and Europe’s FTSEurofirst fell 2.5 percent.

The dollar climbed, mainly due to the euro and pound sliding about 1 percent, as the toll on financial firms spread across the Atlantic and stirred expectations that central banks may have to respond by cutting interest rates. 

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