EU Leaders Meet To Decide On Concerted Financial Rescue Plan

Sun, 12 Oct 2008 12:27:17 +0000
AHN Staff

Paris, France (AHN) - The leaders from 15 European nations are meeting in Paris on Sunday to formulate a concerted response to the global financial turmoil.

Over the last few weeks, the authorities and regulators in the European region have taken several measures to rescue large financial firms such as Belgium's largest financial-services company Fortis NA, Britain's largest lender to landlords Bradford & Bingley PLC, Franco-Belgian lender Dexia and Germany's Hypo Real Estate.

The European Commission officials told reporters that they are hopeful the leaders are likely to find ways to increase security of the region's financial system, to avert credit markets from slumping and to improve firms' balance sheets and lending capacity.

The Commission also said the authorities in the region are considering guaranteeing interbank loans to unfreeze credit markets amid rising concerns on the fate of European financial systems.

Portugal's authorities recently announced that the regulators in the country will provide a 20 billion euro ($27 billion) state guarantee for banks' assets.

Similar steps have been taken by the government in Britain including the rescue plan to provide 50 billion pound ($85 billion) to banks as extra capital.

"Of course, there are also many things we are doing and we still need to do at the level of the European institutions - both in the short and in the medium to longer term," European Commission President Jose Manuel Barroso said in a statement ahead of the summit.

According to Barroso, there are more than 8,000 financial institutions in the EU, but two thirds of total EU bank assets are held in 44 cross-border institutes.

Although the banks seem like working in a single financial market, the cross-border banks are dealing with different systems of supervision in each member state.

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