Banks show strain of economic crisis

By Yuzo Saeki and Ralph Boulton

TOKYO/LONDON (Reuters) - Major world banks showed the unrelenting strain of economic crisis on Tuesday, with Barclays (BARC.L) offering funds to quell shareholder anger and profits in Japan's largest bank tumbling 64 percent.

Japan's economy minister said recession in the world's second-biggest economy could last longer than feared, reflecting a generally darker view now permeating markets.

The crisis, which began with a collapse in the U.S. housing market undermining major financial institutions, also showed further signs of hitting industry and retail.

Barclays, facing shareholder criticism over a decision to take 5.8 billion pounds from Middle East investors on terms tougher than the British government was offering, followed Swiss bank UBS (UBS.N) in announcing it was cancelling 2008 bonus payments to executives.

It also said Qatar Holding LLC and Sheikh Mansour Bin Zayed Al Nahyan would each make up to 250 million pounds of reserve capital instruments available to existing shareholders in the bank in a book building process.

Barclays, one of the four biggest UK banks, had declined to accept any capital from the government under a 37 billion pound bailout, wary of conditions imposed on their operations.

Citigroup Inc (C.N), the second biggest U.S. bank, revealed plans on Monday to cut 52,000 jobs by next year, the second-largest corporate lay-off plan in history.

The crisis has taken a firm hold in Asia with even the Chinese economy, power house of the region, slowing markedly.