This report presents the results of the 2009 Q4 survey. The 2009 Q4 survey was conducted between 16 November and 4 December. The results are based on lenders’ own responses to the survey.

Supply

It has become known as the “Great Recession”, the year in which the global economy suffered its deepest slump since the second world war. But an equally apt name would be the “Great Stabilisation”. For 2009 was extraordinary not just for how output fell, but for how a catastrophe was averted.

Italy's leading bankers and business leaders have called for the Basel II rules on bank capital to be shelved or delayed, fearing a serious credit crunch next year.

The warnings came as Standard & Poor’s listed 17 Italian banks at risk of a downgrade as the delayed effects of rising defaults start to hit home.

Giampaolo Galli, director-general of Italy’s business lobby Confindustria, said the economy could not withstand the shock of credit tightening if stricter rules start to bite next year as planned.

Branches of Clydesdale Bank and Yorkshire Bank could be merged with assets of Royal Bank of Scotland and Lloyds Banking Group in an attempt to create a new retail banking competitor in Britain.

National Australia Bank (NAB), which owns Clydesdale and Yorkshire, said that it had been approached by industry players over potential consolidation involving both of the banks.

The Financial Services Authority (FSA) has strengthened its stress testing regime by requiring firms to improve their stress testing capability, enhance their capital planning stress testing and by introducing a reverse stress testing requirement for firms.

The FSA’s integrated approach to stress testing consists of three main elements:

Three pan-European watchdogs are to be created to oversee the financial services sector under a compromise deal struck by ministers in Brussels.

The breakthrough came after several hours of negotiations on Wednesday, with European Union finance ministers agreeing complex voting and appeal procedures should any country feel the new authorities are overstepping their brief and intruding on areas of national sovereignty.

Shares in banks, builders and companies part-owned in the Middle East fell around the world on Thursday and investors sought safety in government bonds on worries about Dubai's ability to pay its debts.

The Bank of England extended secret emergency financing to Royal Bank of Scotland and to what was then HBOS during the banking panic last October, indicating the two banks were even closer to collapse than had been thought.

From the beginning of October 2008 when Ireland guaranteed the liabilities of all its banks, HBOS needed life support, with RBS also seeking emergency lending on 8 October.

Regulatory reform of the world's banks is becoming a painful thing to watch. The main object, never that clear to start with, is disappearing under a mass of suffocating detail. Perhaps policymakers should turn for guidance to an unlikely source - health and safety.

Big European insurers breathed more easily on Wednesday after the sector’s regulators reined back from a very conservative interpretation of the new capital regime, which companies claimed could have required them to raise billions of additional euros unnecessarily.

Pressure is growing on Gordon Brown over his handling of the economic crisis after the US treasury secretary rejected the PM's plans for a 'bank tax'.

Gordon Brown's call was rebuffed by US treasury secretary Timothy Geithner (R).

Timothy Geithner told Sky News he was "not prepared" to support a global tax on financial transactions.

Exit strategies at St Andrews: G20 nations should not plan their exit strategies from the life support measures they implemented in the midst of financial crisis until they can ensure recovery is sustainable, the chancellor said tonight.

The Bank of England’s monetary policy committee voted on Thursday to expand its vast programme of pumping cash into the UK economy by £25bn, in a sign it remains worried about the outlook in spite of incipient signs of recovery.

As expected, the Bank left interest rates unchanged at 0.5 per cent.

Royal Bank of Scotland (RBS) and Lloyds Banking Group are due to announce plans to set up new banks from their existing branches and sell them off.

The sales have been demanded by the European Commission to safeguard competition concerns after the two were bailed out by the UK government.

Biggest credit crunch bankruptcies so far:

1. Lehman Brothers, September 2008 - value of assets before bankruptcy: USD 691 bn

2. Washington Mutual, September 2008: USD 327 bn

3. General Motors, June 2009: USD 91 bn

4. CIT Group, November 2009: USD 71 bn

5. Chrysler, April 2009: USD 39 bn

6. Thornburg Mortgage, May 2009: USD 36 bn

These bankrupties qualify to the "honorable" top ten all-time-high list.

CIT Group Inc., the 101-year-old commercial lender that saw its funding dry up in the credit crunch, filed for bankruptcy in an effort to cut $10 billion in debt following a failed debt exchange and U.S. taxpayer bailout.

 RBS risks investment bank sale in EC fight

Royal Bank of Scotland may have to accept significant cutbacks in its investment banking division if the bank stands by its desire to keep US retail bank Citizens.

Selling Citizens, which has 26,000 employees, has emerged as one of Brussels' options for penalising RBS's receipt of state aid. Neelie Kroes, the EU competition commissioner, is understood to have taken RBS aback by the severity of her demands.

Congress and the Obama administration are about to take up one of the most fundamental issues stemming from the near collapse of the financial system last year — how to deal with institutions that are so big that the government has no choice but to rescue them when they get in trouble.

The bailed-out Dutch financial services group ING is splitting itself in two, breaking up its banking and insurance arms.