Oct 13, 2008

EU Scheme Also Different From New Zealand's

the Eurozone Ministers have agreed a package to respond to the financial crisis but it is very different from the New Zealand scheme. Like Australia's the EU scheme has a focus on inter-bank lending. This from Radio NZ

Eurozone leaders have agreed to a financial rescue plan at an emergency summit in Paris.
The plan, described as a temporary measure, will require governments to offer liquidity to banks and loosen restraints on credit.
French president Nicolas Sarkozy said on Sunday the single currency bloc of 15 nations has developed a joint response.
They have pledged that no major financial institution will be allowed to collapse.
They also pledged to guarantee loans between banks until 31 December 2009, so as to address the liquidity crisis.
British Prime Minister Gordon Brown attended parts of the talks.
The BBC reports the reluctance of banks to lend to one another has been a key problem of the financial crisis sweeping the globe.
World governments have been racing this weekend to throw banks a lifeline before markets reopen on Monday.
Capital injections
Mr Sarkozy said leaders had agreed a framework in which individual countries would be able to inject capital into their own banks by means of preference shares.
He said governments in Germany, France and Italy among others would be presenting their individual plans on Monday, within the agreed framework.
Mr Sarkozy said the guarantees would be at commercial rates, and he stressed that what he called defective managers would be removed - and rash shareholders would not benefit from the public intervention.
He said the plan addressed all aspects of the financial crisis. However, he did not say how much it would cost.