France, Germany and Spain have announced huge investments into the troubled banking sector. The Fed has also announced new measures to boost liquidity. This from CNN
In televised addresses German Chancellor Angela Merkel and French President Nicolas Sarkozy, who currently holds the rotating presidency of the European Union, outlined plans which will see more than a trillion dollars pumped into the banking sector.
The U.S. Federal Reserve announced it will offer unlimited amounts at fixed rates in exchange for collateral to the central banks of England, Switzerland and the European Union.
The Bank of England, the European Central Bank and the Swiss National Bank will then provide private financial institutions with U.S. dollar loans in the latest attempt to unfreeze credit and boost liquidity, the banks confirmed in a joint statement. Follow latest market prices
Merkel outlined a plan which could see the German government provide $536.7 billion in guarantees for banks and as much as $107.3 billion for recapitalization. Watch more on market recovery »
Sarkozy said his government was ready to spend up to $490 billion on its bank rescue plan. "The taxpayer will be the winner," he told the French people in a nationally televised address. Watch more on the gold rush during the downturn »
Sarkozy said the money included $436 billion to guarantee bank refinancing and another $54 billion for a government-backed financing vehicle to provide banks with the capital they need. The figure was a maximum, which may not be reached if the market started functioning normally.
Meanwhile in Madrid, Spanish Prime Minister Jose Luis Rodriguez Zapatero announced that his government will set aside a maximum of €100 billion ($134 billion) to guarantee inter-bank loans.
