The country's airline industry has been buffeted by falling passenger numbers and huge hedging losses caused by plummeting oil prices, with China Eastern the worst performer of the major carriers.

Confidence in the bank evaporated after the collapse of two of its hedge funds and massive write-downs from losses related to the home loans industry.

First, it has been widely reported that the Bear Stearns hedge funds lost money on highly rated derivative securities based on subprime mortgages.