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STORY:++France Bank- NEW French bank reveals huge loss, finance min presser, 
voxpops
DATELINE: Paris - 17 Oct 2008
STORYLINE:
French
bank Caisse d'Epargne said on Friday it lost 600 (m) million euros (810
(m) million US Dollars) trading derivatives as stock markets collapsed
last week, prompting France's finance minister to order a probe of all
French banks.
The mutual bank said in a statement that the
loss occurred in equity-derivatives trading for its own account and was
triggered by the "extreme market volatility" and the market crash
during the week of October 6.
The Paris-based bank said
the loss will not affect its financial solidity because it has capital
of more than 20 (b) billion euros (27 (b) billion US Dollars) and
significant liquidity.
The bank said it had sanctioned those responsible and notified regulators, 
without elaborating.
Several calls by The Associated Press to the bank seeking further details were 
not immediately returned.
French
Finance Minister Christine Lagarde has asked the banking regulator to
investigate Caisse d'Epargne's trading operations and to verify that
all banks are complying with rules on overseeing their market
operations, although she was relieved the loss didn't affect the
solidity of the bank itself.
Caisse d'Epargne customers
were worried by the news with some even wondering if they would have
been better off keeping their money at home rather than depositing it
in the bank.
Caisse d'Epargne and another French mutual bank, Banque Populaire, announced 
last week plans to combine.
The
tie-up would make the company one of France's biggest banking groups,
with a total of 480 (b) billion euros (659 (b) billion US dollars) in
savings deposits and more than six (m) million customers.
The
banks already jointly control investment bank Natixis, which has been
among those hardest hit in France by the meltdown in United States
subprime mortgage markets.
It was recently forced to raise 3.7 (b) billion euros (5 (b) billion US 
Dollars) in fresh capital.

================

AP-APTN-1530: US Markets
AP-APTN-1530: US MarketsFriday, 17 October 2008
DATELINE: New York City - 17 Oct 2008
STORYLINE:
Wall
Street declined in erratic trading on Friday after the government said
new home construction dropped by more than expected last month to the
lowest pace since early 1991.
The Dow Jones industrial average fell more than 250 points shortly after the 
open before paring its losses.
Housing starts fell more than 6 percent in September to an annual rate of 
817-thousand units, the Commerce Department reported.
That figure is lower than the 880-thousand units forecast by Wall Street 
economists surveyed by Thomson/IFR.
Building permits also sank.
The
report was yet another piece of evidence that the nation is struggling
with a weak economy that, if the financial crisis is not solved, could
dive into a sustained downturn.
President George W. Bush
on Friday said in a speech that the credit markets - where many
companies find funding for their operations - will take a while to thaw
but that Americans should be confident that it will.
Investors
appeared to look past a reading on October consumer sentiment, perhaps
because it was expected after a stream of other negative data on
consumers.
A weaker-than-expected report on retail sales
Wednesday made clear that consumers nervous about the economy and the
faltering stock market are less willing to pull out their wallets.
It's
been an erratic week on Wall Street, with the Dow soaring 936 points on
Monday, slipping moderately Tuesday, sinking 733 points Wednesday, and
then rallying 401
Thursday.
The volatility is not
providing investors with much relief, but it is a welcome change from
last week's relentless plunge, during which the Dow logged its worst
week ever and Wall Street lost about 2.4 (tr) trillion US dollars in
shareholder wealth.
In midmorning trading, the Dow Jones
industrial average fell 108.01, or 1.20 percent, to 8,871.25, after
being down 261 points and briefly edging higher.
Broader stock indicators also fell.
The
Standard & Poor's 500 index declined 5.07, or 0.54 percent,
to 941.36, and the Nasdaq composite index fell 8.74, or 0.51 percent,
to 1,708.97.

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