The Bank of England reduced interest rates by half a percentage point, to 0.5 percent. The central bank also announced the start of its unconventional policy of "quantitative easing," i.e., directly buying government stocks as well as some private assets to boost the money supply.
HSBC confirmed it would raise new capital through a $17.7 billion rights issue. The banking group reported a pretax profit of $9.3 billion in 2008, down by 62 percent from 2007. HSBC's North American division made a $15.5 billion loss, due mostly to a $10.6 billion charge related to the division's consumer-lending business, which HSBC now wants rid of.
The banking industry received rare good news with the release of Standard Chartered's earnings. The bank obtains most of its business from Asia, Africa and the Middle East and made a record pretax profit last year, of $4.8 billion, helped in part by a surge in foreign exchange trading that boosted its wholesale-banking business.
General Electric's boss, Jeffrey Immelt, said the crisis will result in the global economy and capitalism being "reset in several important ways" and that government would become a "key partner" to business.
Eurotunnel announced it would make its first-ever payment to shareholders. The operator of the tunnel that links Britain and France turned a profit of $58 million last year.
There was a brief rally in global stock markets in the hope that China's prime minister, Wen Jiabao, would increase the amount of spending in the country's economic stimulus package. In the end he didn't, though he said the government was committed to achieving economic growth of 8 percent this year and would thereby "significantly increase" investment.
Political economy In her first foray to the Middle East as America's secretary of state, Hillary Rodham Clinton confirmed the new American administration's intention to change tack. In Egypt she said she would provide $900 million for reconstruction in the Gaza Strip. In Israel she contradicted the probable incoming prime minister, Binyamin Netanyahu, by reaffirming America's support for a two-state solution for Israel and Palestine. And in a sign of warming relations with Syria, she also said she would send two emissaries to Damascus.
At a summit in Brussels, E.U. leaders rejected a plea by Hungary for a huge rescue package for Eastern Europe. The Hungarians talked darkly of a new iron curtain being created, a fear reinforced when a European commissioner admitted days later to plans to rescue euro-area countries in difficulty.
