PARIS, Oct 17: Fallout from the financial crisis grew in the real economy on Friday with job losses and a backlash against banking chiefs as shares ended a crazy week with more wild swings.

European and US stocks repeatedly strengthened and fell in the turbulence of hopes for a new start – dashed by a French bank’s admission that it lost $800 million in a derivatives trading “incident” but boosted by the German parliament quickly passing a 480-billion-euro rescue package.

Ukraine said it was negotiating a 14-billion-dollar emergency loan with the International Monetary Fund and Argentina announced it had struck a deal with three foreign banks to renegotiate part of its 150-billion-dollar sovereign debt mountain.

The impact of the crisis spread further with more companies around the world blaming major job losses on the financial turmoil which saw bank lending freeze up in a crisis of confidence over “toxic” US mortgage debt.

Chinese toy maker Smart Union, heavily reliant on the ailing US market, has gone bust due to the financial crisis, leaving up to 7,000 people jobless.

Swedish plane maker Saab said it would cut 500 jobs over two years after announcing heavy losses. Unemployment has grown across Europe with key sectors such as car-makers particularly badly hit as the downturn gathers pace. Many governments and experts have warned of a tough recession looming.

Both houses of the German parliament approved the government’s rescue package for the financial sector. But 99 deputies voted against and Greens parliamentary chief Renate Kuenast said the proposals were a blank cheque for banks that could not be held accountable by taxpayers.

Luxembourg joined the scramble to strengthen bank deposit guarantees. The banking principality increased its guarantee from 20,000 euros to 100,000.

The finance industry’s reputation took a new blow as France’s Caisse d’Epargne bank said it lost about 600 million euros in a trading “incident”.

“Because of the extreme volatility in the markets and the stock market crash of the week of October 6, the Caisse d’Epargne group underwent a major incident in the derivatives market,” said a bank statement.

A company official, speaking on condition of anonymity, told AFP that a group finance director had been sacked over the loss. The bank, which is due to merge with Banque Populaire, insisted the loss did not affect its stability.

Josef Ackermann, head of Deutsche Bank, Germany’s biggest bank, said he would give up his annual bonus of several million euros to show solidarity with staff.

The Swiss executive told Bild am Sonntag newspaper he wanted to show “solidarity” and could do without “a few million” euros in pay.

Germany’s giant services sector union Ver.di said it would not press ahead with planned strikes next month because of the financial sector crisis.

But Swiss newspapers angrily called on former top managers of banking giant UBS to return their bonuses after the bank had to be rescued by the state.—AFP