Monday, October 13, 2008

Europe unified on bank guarantees

BREAKING NEWS FROM EUROPE, via "The Washington Post":
Europe Unified On Proposal to Protect Banks
World Governments Respond to Crisis"

PARIS-- Governments around the world took unprecedented steps Sunday to rescue the global financial system, with major European powers unveiling a united plan to prevent further bank failures while Australia and New Zealand moved to calm panicked investors by guaranteeing deposits before stock markets opened in Asia.

* Europe Unified On Proposal to Protect Banks
* European Banks to Get Billions from Governments
* U.S. Moves to Get $700B Bank Rescue Started
* U.S. Markets Surge in Early Trading

With the newly decisive moves, other major nations are catching up to or surpassing the United States in sculpting a response to the crisis, which crashed stock markets last week and is threatening a broader collapse of the world's interconnected banking system. Although Congress has given the Treasury Department wide authority to intervene in financial markets with a $700 billion bailout plan, officials are still trying to figure out how best to execute it.

This morning, Assistant Treasury Secretary Neel Kashkari, who has been tapped to orchestrate the bailout, is scheduled to give a speech in Washington on the giant rescue package.

In addition to Australia and New Zealand, the United Arab Emirates guaranteed all deposits with local banks yesterday, including the country's two largest lenders, Emirates NBD and National Bank of Abu Dhabi, to ensure that credit continues to flow. This follows moves by some European countries, including Ireland and Germany, to remove or raise the limit on deposit insurance. The United States also increased guarantees for banking deposits from $100,000 to $250,000.

In Europe, where dissent over how to handle the crisis has added fuel to investor panic in recent weeks, leaders presented a unified response for the first time. At an emergency summit of the 15 countries that use the euro, the continent's major economic powers agreed Sunday to offer government guarantees for troubled banks trying to raise funds and pledged that public money would be used aggressively to make sure no European bank is allowed to fail.

Europe's vow to temporarily guarantee bank debt . . .

READ THE REMAINDER of Washington Post article HERE

"Stocks Soar on Pledges of New Capital" at the New York Times.

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