European banks get government help

The plan would give banks liquidity and guarantee inter-bank lending.

EMAIL  |   PRINT  |   SHARE  |   RSS
 
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)

When will stock markets hit a bottom?
  • Within a few days
  • Within a week
  • Within a month
  • They already have

PARIS (CNN) -- The leaders of 15 European nations agreed on Sunday to a plan to ease the global financial crisis by shoring up troubled banks.

French President Nicolas Sarkozy said the plan would refinance banks, guarantee interbank lending and ensure that troubled banks do not fail.

It also will protect individual depositors' accounts and ease some regulations to give banks more flexibility.

The refinancing of the banks and the guaranteeing of interbank loans are good until the end of 2009.

"What we want is to give back banks the means to lend, to support the economy to enable households to borrow for mortgages or consumption and give companies the means necessary to invest for growth," Sarkozy said. "We cannot have a healthy economy and sustainable growth unless we have a solid financial sector."

Sarkozy announced the agreement after a meeting of leaders of the Eurozone countries, which use the euro currency. Sarkozy also holds the rotating European Union presidency.

European officials say the plan is not a gift to bank management and that managers, who contributed to the crisis should be held responsible. The refinancing will be made at market rates and will consider the financial health of the banks.

Each country will take slightly different approaches, because they have different laws and banking regulations, but their actions will be compatible.

"We have a tool kit and we will see what suits whom in order to achieve what we are setting out to achieve, which is to make sure that we don't have an economic crisis in addition to the financial crisis. We need to get things moving again, shifting again. And when things have calmed down, we'll go back to our basic training and responsibilities," Sarkozy said.

The leaders wanted to work quickly to reassure investors before the markets open on Monday. Sarkozy said France, Germany and Italy will hold Cabinet meetings on Monday and will announce concrete plans.

"These measures will be implemented in France without delay," Sarkozy said. British Prime Minister Gordon Brown met with Sarkozy and other leaders before the summit and told reporters there was "common ground now about what needs to be done" to soothe the financial markets.

On Wednesday, officials from the Eurozone countries will present their plan to the rest of the European Union at a meeting in Brussels, Belgium. Sarkozy said that they would then urge the United States to hold an international summit to manage the crisis.

"The crisis didn't come from Europe. It began in the U.S. It has now become a worldwide crisis, and the issue of European structural institutions may be put on the table at some stage, but right now, we're dealing an emergency. And we have to reform urgently an international financial system that needs to be reformed," he said.

-- CNN Senior International Correspondent Jim Bittermann contributed to this report.  To top of page

Features
They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
More Galleries
10 of the most luxurious airline amenity kits When it comes to in-flight pampering, the amenity kits offered by these 10 airlines are the ultimate in luxury More
7 startups that want to improve your mental health From a text therapy platform to apps that push you reminders to breathe, these self-care startups offer help on a daily basis or in times of need. More
5 radical technologies that will change how you get to work From Uber's flying cars to the Hyperloop, these are some of the neatest transportation concepts in the works today. More
Sponsors

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.