Bank lending will take 1-2 years to return to normal, and asset prices need as much as 18 months to stabilise, Barclays chief executive John Varley said in an interview released yesterday.
Varley told BBC television that banks were still lending, but there needed to be a reduction in the overall amount of debt in the economy.
"I think that we will see the process of reduced borrowing play out over at least the course of the next 12 months... maybe 24 months," he said.
"That is a painful process, it's a process through which the world absolutely has to go," he said.
"As soon as asset prices stabilise, then we will see the financial economy recover. And when will that occur? That will occur some time over the course of the next 18 months," he said.
In a separate interview with Sky News earlier last week, Varley said that he expected British house prices to fall a total of 30 per cent from the peak values set in summer 2007.
UAE buys missiles worth $3.3 billion
Iran's Gulf neighbour, the United Arab Emirates, has signed a deal worth $3.3 billion to buy missiles from US firm Raytheon, a newspaper reported yesterday.
The US Defence Department said in September it had proposed the sale of air defence systems and helicopters to the UAE with a total potential value of more than $9 billion. The main item in the Pentagon-proposed package was Terminal High Altitude Area Defence, or THAAD, worth up to $7 billion. The system is built by Lockheed Martin Corp with a system radar from Raytheon Co.
The National, an Abu Dhabi based-newspaper, said the deal was to buy Patriot missiles.
Lebanon appoints ambassador to Syria
Lebanon appointed an ambassador to Syria yesterday, the first time the Arab neighbours will have full diplomatic relations since gaining independence from France in the 1940s.
Syrian President Bashar al-Assad had issued a decree in October to establish diplomatic relations with Lebanon, with whom bilateral ties have thawed since the end of a Lebanese political crisis in May.
Syrian and Lebanese officials have expected ambassadors to be exchanged before the end of this year. The two countries had announced earlier this year they intended to open diplomatic relations at the highest level.
Lebanon did not formally name the ambassador but political sources said it was Michel Khoury, ambassador to Cyprus.
Voters bemused by clean poll
An election in Bangladesh is usually a chance for an ordinary voter to make a quick buck, enjoy a free meal and perhaps even grab a souvenir t-shirt at a campaign rally.
For the man in the street, it is sometimes difficult to tell the difference between the parties and candidates; they rarely live up to their campaign promises anyway.
This year things are different.
"No-one is offering us money or anything else this time," said Abdul Jalil, a rickshaw puller in the capital, Dhaka. "Previously, we would get cash or other gifts during elections."
Bangladesh goes to the polls on December 29 for a parliamentary election the interim government says will be the cleanest in years - if not the country's history. The election, the ninth since independence in 1971, will end nearly two years of mostly emergency rule and return the country to democracy.