European markets continue to tumble on October 16 amid fears of a global economic slowdown and the impact of the Ebola crisis.
The main stock markets in Germany, the UK and France fell more than 2%, tracking a sell-off in Asia and on Wall Street.
On October 15, London’s FTSE 100 saw its heaviest one-day fall in 16 months.
Borrowing costs for Greece and Italy rose, and investors looking for a safe haven pushed the gold price higher.
Analysts said that a raft of disappointing economic and corporate news had unnerved investors.
Recent poor data from China, Germany and the US have heightened worries that global economic recovery could go into reverse.
European markets continue to tumble on amid fears of a global economic slowdown and the impact of the Ebola crisis
Meanwhile concerns about the spread of Ebola and its impact on emerging markets have added to the worries. Companies linked to travel and tourism have seen their share prices fall in the past couple of weeks, offsetting hopes that the recent fall in the oil price would lower their long-term fuel costs.
The price of US crude has gone below $80 a barrel for the first time since June 2012, pulling down oil-related shares such as BP and Tullow.
Financial shares were among some of the biggest fallers across Europe. Royal Bank of Scotland was down another 3.6% after falling heavily on October 15.
Meanwhile, in France, Societe Generale and BNP Paribas fell 5% and 4% respectively amid worries about their exposure to a slowdown in southern European economies.
Greece’s borrowing costs rose on Thursday on fears about the country’s exit from the bailout it received during the financial crisis.
The yield on Greek 10-year bonds rose 85.2 basis points to 8.72% – its highest since January. Investors are worried that the country could struggle to borrow money once it is weaned off bailout money.
In Spain, Madrid’s benchmark IBEX 35 index fell 4.28% after a bond issue failed to raise as much as the government hoped.
Meanwhile, gold traded at a one-month high, while the price of copper and some other metals fell to multi-month lows amid concern that demand would fall because of an economic slowdown.
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BNP Paribas has agreed to a record $9 billion settlement with US prosecutors over allegations of sanctions violations.
As part of the deal, France’s largest bank will plead guilty to two criminal charges of breaking US sanctions against trade with Sudan, Iran and Cuba.
The bank will also be prevented from clearing certain transactions in US dollars for one year from the start of 2015.
The settlement is the largest for such a case in US history.
“Between 2004 and 2012, BNP engaged in a complex and pervasive scheme to illegally move billions through the US financial system,” said US Attorney General Eric Holder in a press conference.
In doing so, BNP Paribas “deliberately and repeatedly violated longstanding US sanctions”, he said.
Eric Holder added that he hoped the settlement would serve as a warning to other companies that did business with the US that “illegal conduct will simply not be tolerated”.
BNP Paribas has agreed to a record $9 billion settlement with US prosecutors over allegations of sanctions violations (photo Euronews)
As part of its agreement with US authorities, BNP agreed to fire and not re-hire 13 individuals who were associated with the sanctions violations.
BNP said as a result of the fine it would take an “exceptional charge” of 5.8 billion euros ($7.8 billion) in the second quarter of this year.
It said this was on top of the $1.1 billion it had already set aside to cover the cost of the US penalties.
However it said it expected “no impact on its operational or business capabilities”, and said it would post “solid results” for the second quarter.
BNP chief executive Jean-Laurent Bonnafe said resolving the issue was “an important step forward” for the bank.
“We deeply regret the past misconduct that led to this settlement,” he added.
In a conference call on Tuesday morning, Jean-Laurent Bonnafe explained that during the year in which the bank was banned from dollar clearing – converting payments from foreign currencies into US dollars – it would engage a third party to carry out the transactions.
Jean-Laurent Bonnafe added that as part of the settlement BNP Paribas would be able to keep its license to operate in the US.
The Swiss financial regulator, FINMA, also announced that it had closed its investigation into BNP Paribas operations in the country, following the US authorities’ decision.
FINMA said in a statement that BNP Paribas had “persistently and seriously violated its duty to identify, limit and monitor the inherent risks” relating to foreign transactions.
Shares in BNP Paribas rose more than 3% in morning trading, following assurances that the bank could weather the $9 billion fine.
France has been pressing the US over the size of the fine, which almost equals BNP’s entire 2013 pre-tax income of about 8.2 billion euros ($11.2 billion).
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French banking giant BNP Paribas has agreed to pay an $8.9 billion fine for allegedly violating US sanctions rules, reports suggest.
The bank will also, unusually, admit guilt, Financial Times and The New York Times reported.
According to the Wall Street Journal, BNP plans to slash its dividends and issue billions of euros of bonds to pay the fine.
The bank is accused of breaking sanctions against Iran, Sudan and Cuba.
This is alleged to have taken place between 2002 and 2009.
BNP Paribas has agreed to pay an $8.9 billion fine for allegedly violating US sanctions rules
The reported size of the fine could almost wipe out BNP’s entire 2013 pre-tax income of about $11.2 billion.
In April, BNP Paribas said it had set aside $1.1 billion to cover the cost of US penalties, but warned that the “amount of the fines could be far in excess of the amount of the provision”.
Earlier this month, one of the EU’s top officials intervened in the controversy.
Michel Barnier, the EU’s internal markets commissioner, said any penalty on the giant French bank must be “fair and objective”. Reports at the time suggested the fine would be in the region of $10 billion.
France’s President Francois Hollande has raised the matter with President Barack Obama, while French Foreign Minister Laurent Fabius recently warned that such a fine could hurt EU-US trade treaty talks.
As part of the deal with US authorities, BNP may be suspended from converting foreign currencies into dollars, reports suggest, which would hit its ability to operate in international wholesale banking markets.
US authorities are keen to make an announcement on the settlement on Monday afternoon.
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