LONDON, Jan 21: A worsening banking crisis confronted US President Barack Obama on his first full day in office on Wednesday as worldwide economic turbulence rumbled on with governments warning of bitter recession.

As the glitter from Obama’s star-studded swearing-in ceremony faded, the problems facing him took on new urgency as global banking woes intensified and speculation grew about more nationalisations in the troubled sector.

Obama told cheering crowds at Tuesday’s inauguration that an era of economic “greed and irresponsibility” was over and pledged swift and bold action to kick-start the world’s biggest economy.

But his words were not enough to shore up the markets.

“There’s certainly no evidence of the Obama effect,” said CMC Markets dealer Nick Mitchell.

“The financial sector remains very much at the centre of the crisis with banks struggling to find ways that they can continue to recapitalise.”

Dire economic forecasts from Europe further dimmed the mood. Germany, Europe’s biggest economy, said it would suffer its deepest recession since World War II this year, with another half a million Germans expected to be out of work by the end of the year.

“This economic downturn that we are unfortunately having to predict is without precedent in the post-war period, it is the biggest slump in Germany’s recent history,” Economy Minister Michael Glos told a news conference, as the government discussed a 50-billion-euro rescue package.—AFP