The Government will do "anything it takes" to prevent the financial system collapsing, including taking more than 50 per cent stakes in banks, sources said.The radical proposals go significantly further than Gordon Brown's original bail-out unveiled last week. It will spark suspicions that the Prime Minister may have to take more drastic action, even going so far as to nationalise the entire banking system.The development came after the Group of Seven (G7) leading finance ministers pledged to follow Britain's lead and part-nationalise vast sections of the Western banking system in their latest effort to bring the crisis to a close.At their summit in Washington the G7 promised to buy shares in struggling banks if necessary in the coming months. With shares in major markets plunging by a fifth last week, ministers hope that the commitment will boost confidence in the coming week.
The Government will do "anything it takes" to prevent the financial system collapsing, including taking more than 50 per cent stakes in banks, sources said.
The radical proposals go significantly further than Gordon Brown's original bail-out unveiled last week. It will spark suspicions that the Prime Minister may have to take more drastic action, even going so far as to nationalise the entire banking system.
The development came after the Group of Seven (G7) leading finance ministers pledged to follow Britain's lead and part-nationalise vast sections of the Western banking system in their latest effort to bring the crisis to a close.
At their summit in Washington the G7 promised to buy shares in struggling banks if necessary in the coming months. With shares in major markets plunging by a fifth last week, ministers hope that the commitment will boost confidence in the coming week.
Nationalisation fears
The Telegraph is part of the problem and not part of the solution, by making nationalisation sound like a problem.
Hmmm.... maybe they should be taken over by the government as well? In the long run, we're all dead. John Maynard Keynes
Germany is preparing a bail-out that permits the recapitalization of banks with billions of euros in cash injections, according to news reports. The IMF warned of the growing possibility of a global finance "meltdown." Germany is expected to guarantee interbank loans for up to several hundred billion euros and bail out banks in exchange for shares in the institution, similar to the partial nationalization plan announced in Britain this week. "This is about providing the banks with sufficient capital," Merkel told reporters. "I don't rule out that there will be capital injections." Chancellor Angela Merkel has said on Saturday, Oct. 11, that she will sign off with fellow euro zone leaders Sunday before going into the rescue plan's details. Merkel's Cabinet is set to approve the plan on Monday, the Web site of the German business daily Handelsblatt reported.
Germany is expected to guarantee interbank loans for up to several hundred billion euros and bail out banks in exchange for shares in the institution, similar to the partial nationalization plan announced in Britain this week.
"This is about providing the banks with sufficient capital," Merkel told reporters. "I don't rule out that there will be capital injections."
Chancellor Angela Merkel has said on Saturday, Oct. 11, that she will sign off with fellow euro zone leaders Sunday before going into the rescue plan's details. Merkel's Cabinet is set to approve the plan on Monday, the Web site of the German business daily Handelsblatt reported.
German Chancellor Merkel and French President Sarkozy discussed the option of partially nationalizing European banks ahead of a meeting of euro zone leaders. Berlin is also reportedly set to present its own rescue deal. The pair met at the home village and final resting place of General Charles de Gaulle on Saturday, Oct. 11, one day before a Paris summit on the global credit crisis of the leaders of all 15 members of the euro zone. France and Germany have "exactly the same view" on the financial crisis, Sarkozy told reporters. "We have prepared a certain number of decisions that we will submit to our partners in the presence of the president of the European Commission and the governor of the (European) central bank," he said. "All decisions, all preparations and all analyses, we're making together."
The pair met at the home village and final resting place of General Charles de Gaulle on Saturday, Oct. 11, one day before a Paris summit on the global credit crisis of the leaders of all 15 members of the euro zone.
France and Germany have "exactly the same view" on the financial crisis, Sarkozy told reporters.
"We have prepared a certain number of decisions that we will submit to our partners in the presence of the president of the European Commission and the governor of the (European) central bank," he said. "All decisions, all preparations and all analyses, we're making together."
Brown offers Europe a lesson in leadership If eurozone leaders were truly bold, they could use this crisis as an opportunity to strengthen governance procedures. It would be very desirable. The UK bank recapitalisation scheme was the first useful contribution politics has made since the crisis broke out 14 months ago. Gordon Brown, the British prime minister, gave the Europeans a lesson in political leadership when other leaders were running for cover and reverting to spin doctoring.
If eurozone leaders were truly bold, they could use this crisis as an opportunity to strengthen governance procedures. It would be very desirable. The UK bank recapitalisation scheme was the first useful contribution politics has made since the crisis broke out 14 months ago. Gordon Brown, the British prime minister, gave the Europeans a lesson in political leadership when other leaders were running for cover and reverting to spin doctoring.
The spin seems to be hardening that (i) Europeans have a worse crisis than the Anglos, (ii) they are hopeless are coordinating their policies, thereby demonstrating yet again what a failed project the EU is, and (iii) the solutions are coming from the English-speaking world.
Sigh. In the long run, we're all dead. John Maynard Keynes
Members of the IMF have backed a promise by the world's seven leading economies to do all they can to curb the raging global market turmoil as Euro zone countries meet Sunday to announce new rescue plans for banks. At a meeting on Saturday in Washington, the IMF's 185 member countries also pushed for more coordination with developing nations which are beginning to feel the effects of the global credit crunch. With global stock markets plunging and access to credit severely curbed across the globe, tackling the crisis required "exceptional vigilance, coordination and readiness to take bold action," a statement from the International Monetary and Financial Committee (IMFC), the IMF's policy-guiding body, read.
At a meeting on Saturday in Washington, the IMF's 185 member countries also pushed for more coordination with developing nations which are beginning to feel the effects of the global credit crunch.
With global stock markets plunging and access to credit severely curbed across the globe, tackling the crisis required "exceptional vigilance, coordination and readiness to take bold action," a statement from the International Monetary and Financial Committee (IMFC), the IMF's policy-guiding body, read.
Chancellor Angela Merkel sought backing Sunday from skeptical Germans for a costly bank rescue plan. Berlin's bail-out package could cost German taxpayers billions of euros. In remarks to a Sunday newspaper, Bild am Sonntag, Merkel said, "Only action by the state can restore necessary confidence now." Before a meeting Sunday, Oct. 12, in Paris of the 15 euro zone leaders, she said that the intervention had to be internationally coordinated. "We are not doing this for the sake of the banks but in the interests of the people," she told the mass-market Bild. As in the United States, the German left has grumbled at a rescue likely to cost tens of billions of euros, saying it comes only a few years after a reduction in the scale of welfare handouts to the German poor.
In remarks to a Sunday newspaper, Bild am Sonntag, Merkel said, "Only action by the state can restore necessary confidence now."
Before a meeting Sunday, Oct. 12, in Paris of the 15 euro zone leaders, she said that the intervention had to be internationally coordinated.
"We are not doing this for the sake of the banks but in the interests of the people," she told the mass-market Bild.
As in the United States, the German left has grumbled at a rescue likely to cost tens of billions of euros, saying it comes only a few years after a reduction in the scale of welfare handouts to the German poor.
PARIS: European financial and political leaders agreed late Sunday to a plan that would inject billions of euros into their banks in a bid to restore confidence to the teetering financial system. Following the British rescue package announced last week, the countries pledged to take equity stakes in distressed banks and vowed to guarantee bank lending for periods up to five years. "We are committed in all European states to recapitalize banks if we establish a threat to solvency and a risk to the economy," the Belgian finance minister, Didier Reynders, said after the leaders met. "The goal is to kick-start the interbank lending market." Reynders said the European Central Bank had also committed to helping to unfreeze the commercial paper market, where companies conduct short-term borrowing.
PARIS: European financial and political leaders agreed late Sunday to a plan that would inject billions of euros into their banks in a bid to restore confidence to the teetering financial system.
Following the British rescue package announced last week, the countries pledged to take equity stakes in distressed banks and vowed to guarantee bank lending for periods up to five years.
"We are committed in all European states to recapitalize banks if we establish a threat to solvency and a risk to the economy," the Belgian finance minister, Didier Reynders, said after the leaders met. "The goal is to kick-start the interbank lending market."
Reynders said the European Central Bank had also committed to helping to unfreeze the commercial paper market, where companies conduct short-term borrowing.
Gordon Brown arrived at the Elysee Palace in Paris today for the latest international leg of his campaign to promote a British bank bailout plan among world leaders. Despite the UK not being part of the euro, the Prime Minister met President Nicolas Sarkozy of France ahead of a summit of the 15 eurozone members and will brief them on the plan in which the Government will inject billions of pounds into struggling banks in return for preferential shares. The plan is being looked upon favourably by Western leaders - including the Bush Administration - as a way of injecting confidence and liquidity into the financial system whilst retaining a politically favourable stake for the taxpayer. Europe also looks set to follow suit. This weekend exact details began to emerge about how much the British Government will inject into the top UK banks.
Gordon Brown arrived at the Elysee Palace in Paris today for the latest international leg of his campaign to promote a British bank bailout plan among world leaders.
Despite the UK not being part of the euro, the Prime Minister met President Nicolas Sarkozy of France ahead of a summit of the 15 eurozone members and will brief them on the plan in which the Government will inject billions of pounds into struggling banks in return for preferential shares.
The plan is being looked upon favourably by Western leaders - including the Bush Administration - as a way of injecting confidence and liquidity into the financial system whilst retaining a politically favourable stake for the taxpayer. Europe also looks set to follow suit.
This weekend exact details began to emerge about how much the British Government will inject into the top UK banks.
Europe's leaders meeting at an economic crisis summit in Paris have pledged that no major financial institution will be allowed to collapse. They also pledged to guarantee loans between banks on a temporary basis, in order to address the liquidity crisis. 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. French President Nicolas Sarkozy - the current European Union head - 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.
Europe's leaders meeting at an economic crisis summit in Paris have pledged that no major financial institution will be allowed to collapse.
They also pledged to guarantee loans between banks on a temporary basis, in order to address the liquidity crisis.
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.
French President Nicolas Sarkozy - the current European Union head - 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.
Brazilian President Lula da Silva said that emerging market nations like Brazil must have a strong say in developing strict international rules for financial institutions which will help control the anarchy hitting the world economy. Brazil and other developing countries "need to learn from this crisis to construct a new world economic order" Lula da Silva said in a speech to Brazilian and US trade investment forum attended by US Commerce Secretary Carlos Gutierrez. Lula da Silva demanded tighter regulations for high risk investments in rich nations that he and many other leaders of developing market nations blame for eroding their economies after they spent decades adopting US backed reforms. New rules are crucial to "control the anarchy that is hitting the world economy" said the Brazilian president, laying out harsh criticism for bankers who made risky bets on mortgage-backed securities that went bad. "What happened is that some people acted like they were teenagers with failing grades on their report cards, wanting to hide them from their parents" he underlined. Central banks around the planet must adopt new rules, and governments must make sure financial institutions comply or are punished to prevent another debacle like the US born crisis, said Lula da Silva.
Brazil and other developing countries "need to learn from this crisis to construct a new world economic order" Lula da Silva said in a speech to Brazilian and US trade investment forum attended by US Commerce Secretary Carlos Gutierrez.
Lula da Silva demanded tighter regulations for high risk investments in rich nations that he and many other leaders of developing market nations blame for eroding their economies after they spent decades adopting US backed reforms.
New rules are crucial to "control the anarchy that is hitting the world economy" said the Brazilian president, laying out harsh criticism for bankers who made risky bets on mortgage-backed securities that went bad.
"What happened is that some people acted like they were teenagers with failing grades on their report cards, wanting to hide them from their parents" he underlined.
Central banks around the planet must adopt new rules, and governments must make sure financial institutions comply or are punished to prevent another debacle like the US born crisis, said Lula da Silva.
The market is not self-correcting, it's self-serving.
From FundaMental Transformation In the long run, we're all dead. John Maynard Keynes
Baltic Index Collapsing? I believe many of my readers especially those in the industry are seeing a slide off never before experienced in current times. From a high of 11,000 to the Baltic Dry Index trying to hang on to 2200. Obviously the bigger picture of economic crisis is the big picture, yet the speed of the decline is extremely disturbing to say the least. The last time the Baltic was at this levels, Oil was not at USD 80 per barrel. (...) Now the one big real fear is that the Baltic is getting squeeze even further is that Traders are increasing finding it tougher to trade commodities and goods because of the increasing reluctance by banks to issue Letters of Credit. Of course, if they decide not to honor existing letters of credit, then all hell breaks loose.
Obviously the bigger picture of economic crisis is the big picture, yet the speed of the decline is extremely disturbing to say the least. The last time the Baltic was at this levels, Oil was not at USD 80 per barrel.
(...)
Now the one big real fear is that the Baltic is getting squeeze even further is that Traders are increasing finding it tougher to trade commodities and goods because of the increasing reluctance by banks to issue Letters of Credit. Of course, if they decide not to honor existing letters of credit, then all hell breaks loose.
President Bush is down to his final 100 days in office as of Sunday. Don't expect a quiet fade into the Texas night. The bleakest economic downturn in decades has changed the dynamic drastically, keeping Bush and his financial team in activist mode to the end. While the powerful heads of the Treasury Department and the Federal Reserve keep making radical moves, no one elected them. Bush is the one charged with reassuring the nation that an abysmal economic period will give way to better days, even if he is long gone from Washington by the time that happens. ... "It looks like I'm going to have a lot of work to do between today and when the new president takes office," Bush said this past week. ... "There will be a desire to work every day on this bailout, because they will want to have everything set before the next guy comes in," said Grover Norquist, president of Americans for Tax Reform. A conservative friend of the administration but a critic of the taxpayer-funded $700 billion plan, Norquist said: "If you chose to give the treasury secretary billions of dollars to play with, why would you want to hand it over to the next guy?"
While the powerful heads of the Treasury Department and the Federal Reserve keep making radical moves, no one elected them. Bush is the one charged with reassuring the nation that an abysmal economic period will give way to better days, even if he is long gone from Washington by the time that happens. ...
"It looks like I'm going to have a lot of work to do between today and when the new president takes office," Bush said this past week. ...
"There will be a desire to work every day on this bailout, because they will want to have everything set before the next guy comes in," said Grover Norquist, president of Americans for Tax Reform. A conservative friend of the administration but a critic of the taxpayer-funded $700 billion plan, Norquist said: "If you chose to give the treasury secretary billions of dollars to play with, why would you want to hand it over to the next guy?"
"It looks like I'm going to have a lot of work to do between today and when the new president takes office," Bush said ...
Oh flying horse farts
Stock up on beans and rice.
We're doomed, I tell you! DOOOOOOOOOOOOOOOMMMMMMMMMEEED!
Which is just fine with everyone, except the legendary 30% who still believe he was an outstanding success.
Clearly, what we are going through is the results of the Clenis and the Congress.
[Apologies if I don't have the "President doesn't have that much power" meme that is being inculcated through the winger press and radio. Did the best I could.] Never underestimate their intelligence, always underestimate their knowledge.
Frank Delaney ~ Ireland
But wingers really do seem to believe this. Poor George just didn't have the power - a victim of circumstances foisted on him by evil Demonazis.
Mad world.
As more countries become enveloped by the financial pandemic that began in the United States, some in the Southeast Asian nation of Malaysia are warily watching the events with a dose of schadenfreude. After all, it was just a decade ago that the commodities-rich exporter was lambasted for ignoring the blueprint world leaders and the International Monetary Fund had urged. Instead of taking tens of billions of dollars in aid from the IMF, Malaysia did what was viewed then as a radical move: it self-prescribed its recovery. It stopped outflows of capital for one year, stabilized its volatile currency rate by fixing it to the U.S. dollar and refused to rein in spending. "We were criticized by everybody but we believed strongly we only had the people of Malaysia to answer to," said former Finance Minister Daim Zainuddin yesterday in a phone interview from Kuala Lumpur. "We had seen what had happened with African nations that had taken aid from the IMF; they never are freed."
After all, it was just a decade ago that the commodities-rich exporter was lambasted for ignoring the blueprint world leaders and the International Monetary Fund had urged.
Instead of taking tens of billions of dollars in aid from the IMF, Malaysia did what was viewed then as a radical move: it self-prescribed its recovery. It stopped outflows of capital for one year, stabilized its volatile currency rate by fixing it to the U.S. dollar and refused to rein in spending.
"We were criticized by everybody but we believed strongly we only had the people of Malaysia to answer to," said former Finance Minister Daim Zainuddin yesterday in a phone interview from Kuala Lumpur. "We had seen what had happened with African nations that had taken aid from the IMF; they never are freed."
