90 seconds at 9 am with BNZ: European fears growing as bank stocks fall, funding stress grows and Germany opposes ECB money printing; NZ$ hits 75 USc

Bernard Hickey details the key news overnight in 90 seconds at 9 am in association with Bank of New Zealand, including news that European and US stocks fell sharply overnight on growing fears the European financial crisis is threatening again to stumble out of control again.

European stocks fell more than 2% and US stocks were down more than 1% in late trade.

Rumours that France's AAA credit rating may be cut helped undermine investor confidence, although a denial help boost US stocks in the last two hours of trade. See more here at Bloomberg.

Measures of stress inside the European banking system are growing to Lehman Crisis levels as banks worried about other banks' exposure to sovereign debt hold back from lending to each other.

This is forcing many to go to the European Central Bank to borrow money as a lender of last resort. Germany remains implacably opposed to the European Central Bank massively printing money to buy sovereign bonds, widely seen as the only measure likely to stabilise the situation.

There have been reports in recent days that Germany's second largest bank, Commerzbank, is in talks about a bailout by the German government. France's largest banks are also under significant stress.

Credit Agricole, which sold NZ$250 million worth of deeply subordinated bonds to New Zealand investors in 2007, is expected to report a loss this year and announce plans to cut 2,350 jobs to strengthen its balance sheet. See more here at Bloomberg.

Meanwhile, Italy sold €3 billion of 5 year bonds at almost 6.5% overnight, which is widely seen as unsustainable for Italy as it prepares to refinance €53 billion in the first quarter of 2012. See more here at Bloomberg.

Assets seen as riskier were sold off around the world, particularly those that had previously been bought with borrowed money.

The gold price slumped to under US$1600/oz.

The New Zealand dollar was also weak in early morning trade at 75 USc.