------- EU

Germany, France, Italy, and 12 other European countries unveiled a comprehensive plan for salvaging their banking systems from potential ruin on Monday.
Under a 13-point draft action plan, the European Central Bank (ECB) will intervene in the financial turmoil to boost liquidity. Meanwhile, eurozone governments will underwrite bank debt until the end of next year and commit to preventing the collapse of “systematically relevant institutions through appropriate means including recapitalization”.
The three elements -- liquidity support, interbank lending guarantees, and recapitalization of distressed banks -- are the core of Gordon Brown’s plan announced last week. The UK model now looks set to become the European standard, with national variations to take account of differing systems.
Factoring in Britain’s estimated £500b package as well as parallel plans in parts of Scandinavia and central Europe outside the 15-country eurozone, the package could take the cost for the EU’s 27 states to €2t (£1.52t).
EU finance ministers have tried to bolster confidence in the battered banking system by agreeing to raise the minimum level of guarantee on bank savings across member states from €20,000 to €50,000 for one year. They have also agreed to support bigger financial institutions that might cause systemic failure if they were allowed to go under. Some may guarantee up to €100,000.
The ECB also joined the coordinated rate-cut and it is offering unlimited liquidity at weekly auctions. Estimated total: €2t
----------- UK
The Treasury unveiled a £500b banking package to boost liquidity and guarantee interbank lending.
Up to £50b is available to buy stakes in eight participating banks — HSBC, HBOS, Nationwide, Barclays, Standard Chartered, Abbey, Lloyds, and RBS. On Monday, RBS said it would ask for £20b, with £17b going to Lloyds TSB and HBOS, which are still merging.
The savings guarantee for depositors was raised from £35,000 to £50,000 and the Bank of England cut interest rates by 0.5 basis points. Total: £500b
--------------- Ireland
All deposits held in the country’s six biggest banks and two building societies will be guaranteed for two years after Irish bank shares suffered huge share price falls at the end of September. The €400b scheme was also extended to foreign-owned banks. Total: €400b
------------ Greece
The country followed Ireland’s lead with a blanket guarantee amid signs that savers were becoming restless. Under existing law, the Greek government guarantees just the first €20,000 of savers’ deposits. Total: €400b
--------- Germany
After criticizing the Irish plan to guarantee all private savings, Germany announced a blanket guarantee worth €568b to prevent panic withdrawals.
A credit guarantee of €68b in Hypo Real Estate, a property and public finance lender, has been made available, with the government providing €26b. The action sparked anger from the UK Treasury, which felt pressure after raising the guarantee for savers to only £50,000.
The Merkel government has also drafted emergency laws which factor in €500b – of which about €400b is earmarked to guarantee medium-term bank lending and get credit markets moving again. The remaining €100b in fresh capital is for underwriting German banks’ debt issuance.
Merkel said she was abandoning her aim of balancing Germany’s budget by 2011. Total: €500b
----------- Denmark
Denmark, which has some of the most exposed banks, joined Ireland, Greece and Germany with a blanket guarantee. Deposits in Danish banks had previously been guaranteed up to 300,000 crowns.
In return for the government guarantee, banks agreed to pay up to 35b crowns over two years into a liquidation fund that could take over distressed institutions to avoid losses to depositors and certain creditors. Total: 35b crowns (£3.66b)
------------- France
Troubled banks are being supported by a standalone rescue fund. A case-by-case approach is being used, with stakes being taken in banks in difficulty. A guarantee of €70,000 is in place.
The government has allocated €360b, €40b of which could be used to buy bits of ailing banks. Total: €360b
------------- Iceland
The three largest banks were nationalized after confidence in the banking system was blown to pieces.
All trading on the stock exchange was suspended on October 9 and shares crashed when trading restarted on Tuesday. The UK Treasury has sent a financial team to help the stricken country sort through its financial woes.
Iceland has also asked Russia for a €4b loan and introduced emergency laws giving the government sweeping powers to take over banks, force them to merge or even go into bankruptcy.
Sweden is granting liquidity assistance to the Swedish arms of Icelandic bank Kaupthing, with a total loan of up to SKr5b (£400m).
----------- Russia
Trading has been halted on stock markets on several occasions after the steepest falls on record. State financial packages have been adopted to pump more than $150b in loans into the biggest banks.
If new laws are passed, Russian banks could start getting money from the 950b rouble government rescue package later this week. Another $50b is being made available to help Russian companies and banks refinance their debts. Total: 950b roubles (£20.75b)
---------------- Italy
Under emergency measures, the state is allowed to underwrite recapitalization of banks or become a shareholder. Deposits of up to €103,000 are guaranteed. Italy’s central bank offered to buy bank debt to the tune of €40b. Total: €40b
------------ Spain
Guarantees of about €20,000 have been announced, while a €30b-50b emergency fund will provide liquidity by buying bank assets. A further €100b is available for bank buyouts, interbank lending and bank bond issuance guarantees. But the government has said there is no need yet to make money available for banks recapitalization. Total: €100b
--------- Austria
The government plans to make €100b available for bank buyouts, interbank lending and bank bond issuance guarantees. Of this, 85% will be used to underwrite bank lending if necessary. Total: €100b
---------- Belgium
Another country with highly exposed banks, Belgium announced it would guarantee all new financing of banks for one year after talks to secure the Franco-Belgian bank Dexia’s future. There has been an injection of €4.7b for 49% of faltering Fortis bank, with the remaining assets of the bank to be taken over by BNP Paribas. Total: €4.7b
----------- The Netherlands
Guarantees of about €20,000 have been announced to safeguard deposits and €16.8b is being spent to take full control of Fortis’s operations in the Netherlands.
The Dutch Prime Minister, Jan Peter Balkenende, has announced €200b is available for interbank loans. Total: €200b
------------ Portugal
Portugal has offered a financing line worth €20b to guarantee the liquidity of its banks amid the financial crisis. The money offered is 11.7% of the country’s gross domestic product and is backed by the Bank of Portugal. Total: €20b
-------------- Sweden
The government is due to unveil plans to safeguard its financial system in next few days, but it does not plan to inject capital into its banks. Instead, it hopes to create a regulatory framework.
Finance Minister, Anders Borg, said the government was considering raising state guarantees on bank deposits for savers; it doubled them earlier this month to 500,000 Swedish kronor (£40,000).
Sweden joined the central banks in cutting interest rates but Borg insisted Sweden differed from other European countries and did not have any failed banks; therefore, the need for reconstruction was not as great.
----------- Finland
Finland, a member of the EU and the eurozone, has made clear it will take action if needed but insisted capital injections were not being considered.
Peter Nyberg at the finance ministry said there were no contagion effects from Iceland, and Finnish banks were not active in the U.S. sub-prime market.
------------ Switzerland
The Swiss government also took part in the coordinated rate cut and welcomed the G7 and European action. It plans to introduce its own measures.
----------- Poland
The government adopted plans to guarantee bank deposits up to €50,000, while the central bank is due to announce a rescue package for the banking system.
------------ Norway
Norway is going to lend $55b to Norwegian commercial banks, taking distressed mortgage assets as collateral for periods of up to three years. The government has stressed that Norwegian banks have virtually no exposure to the U.S. sub-prime market and rely on depositors rather than wholesale markets for funding. Total: $55b
------------- Japan The government is considering guaranteeing all bank deposits after a failed medium-sized insurer became the country’s first casualty of the credit crunch.
----------- China
China joined in coordinated action by the world’s central banks for the first time by cutting interest rates by 0.27 percentage points to boost the economy amid the financial crisis.
---------- India
Money for its dried up markets has been pledged and cash reserve requirements have been slashed by 150 basis points to 7.5%, releasing about $12b into the banking system.
----------- Singapore
Singapore’s central bank, known as the monetary authority, has shifted its foreign exchange rate policy to a “zero% appreciation” of the Singapore dollar from a “modest and gradual appreciation” to try to boost the competitiveness of the country’s exports. The export-reliant economy has been hit by the global downturn, pushing it into recession.
Policymakers have also boosted guarantees for depositors and are promising to pump more cash into the credit economies.
Authorities have also tried talking up the economy, with assurances that its banking systems are sound and the government will intervene if necessary. Similar action was taken in Hong Kong and Bahrain.
--------- South Korea
In a bid to calm investors, the government is repeating assurances that its reserve stockpile is sufficient to ride out the global storm and has confirmed plans to give banks better access to private capital.
Authorities announced plans to raise the limit for non-financial companies’ investments in domestic banks and make it easier for pension and private equity funds to become controlling shareholders in lenders.
---------- Indonesia
Having been one the Asian economies to suffer most during the financial crisis a decade ago, authorities have raised the guarantee on bank deposits to two billion rupiah (£118,000) and made it easier to flood tight money markets with funds.
The stock market was closed for three days and a 10% limit imposed by the stock exchange on price swings has helped underpin the market.
---------- Qatar
Qatar’s central bank Launched a $5.3b plan to purchase shares of its listed banks. Total: $5.3b
------------- Saudi Arabia
The lending rate has been cut to provide more liquidity to its banks.
---------- United Arab Emirates
The government has guaranteed its bank deposits and is pumping 70b dirhams ($19b) of emergency funds into the banking sector. That brings the total funds UAE has devoted to its banking sector to fend off the credit crisis to 120b dirhams ($32.67b) Total: $32.67b
--------- Australia
Australia has already reduced rates by a whole percentage point. The government guaranteed all bank deposits for three years and took measures to make it easier for central banks to pump funds into tight money markets – a measure also taken by New Zealand.
A A$10.4b ($7.4b) fiscal stimulus package to bolster the economy has also been unveiled. The spending plan, equivalent to 1% of GDP, includes A$4.8b for pensioners and A$3.9b for low- and middle-income groups. First-time home buyers will receive about A$1.5b in additional support measures and about $187m will go towards a labor skills program. Total: $10.4b
---------- The U.S.
The largest government intervention in decades saw a $700b (£380b) bailout of the banking industry. The core proposal authorizes the treasury to spend billions of dollars cleaning up the balance sheets of struggling banks by buying up toxic debt. The plan also increases protection for U.S. bank customers by raising the limit of a federal guarantee on deposits from $100,000 to $250,000.
The Federal Reserve joined global central banks in cutting interest rates by 0.5 percentage points to 1.5%.
The U.S. government appears ready to take major stake in its own financial institutions, abandoning Treasury secretary Henry Paulson’s earlier plan to simply mop up toxic assets and following the UK model. It is believed that $250b out for the $700b already available will be used to buy stakes in various Wall Street names. Total: $700b
--------- Canada
Canada, which joined central banks in cutting interest rates, is expected to announce further measures soon.
(Source: Guardian)