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(Reuters) - The world's richest nations have vowed to prevent vitally important banks from failing and to unfreeze credit markets in a bid to halt panic in financial markets.
The Group of Seven plan, however, was short on details.
Eurogroup leaders from the 15 countries using the euro currency meet in Paris on Sunday to hammer out the specifics of a European response to the crisis.
Below are details of the financial rescue plans already in place or under consideration by leading countries:
UNITED STATES - $700 billion plan
- BANK CAPITAL: The Treasury can inject capital into financial institutions, including insurance companies, that seek government aid
- The Treasury can buy up troubled mortgage assets from financial institutions
- BANK DEPOSITS: insured up to $250,000 per account. The Treasury can lend an unlimited amount to the bank insurance agency to ensure depositors in failed banks are repaid.
- Securities regulators can suspend mark-to-market accounting, blamed for forcing financial institutions into insolvency when market value of assets plunge or are unknown
UNITED KINGDOM - 400 billion pounds ($691 billion)
- BANK CAPITAL: UK government can inject up to 50 billion pounds ($87.8 billion) capital into banks, half of the sum would be preference shares or permanent interest bearing shares.
- GUARANTEE INTER-BANK BORROWING: UK government will guarantee about 250 billion pounds ($439 billion) in short- and medium-term borrowing by banks
- LIQUIDITY: Bank of England to lend banks at least 200 billion pounds ($351 billion) via auctions to make sure banks have enough cash to operate. This doubles its existing liquidity auctions and is in addition three-month sterling and one-week dollar auctions.
GERMANY - reportedly 400 billion euros ($549 billion)
The German government is working on a British-style plan to be adopted in the next few days with the following features, according to media reports in Germany:
- BANK CAPITAL: Germany may inject capital into banks on short-term basis, possibly in return for equity stake that could total 50 billion to 100 billion euros
- GUARANTEE INTER-BANK BORROWING: Lending between banks could be insured in a program worth hundreds of billions of euros
IRELAND - 400 billion euros ($549 billion)
- BANK CAPITAL: the government can take a stake in any of the six banks covered by its plan
- BANK DEPOSITS: guaranteed in its six banks, plus any other liabilities
JAPAN
- May consider injecting capital into banks
The Group of Seven plan, however, was short on details.
Eurogroup leaders from the 15 countries using the euro currency meet in Paris on Sunday to hammer out the specifics of a European response to the crisis.
Below are details of the financial rescue plans already in place or under consideration by leading countries:
UNITED STATES - $700 billion plan
- BANK CAPITAL: The Treasury can inject capital into financial institutions, including insurance companies, that seek government aid
- The Treasury can buy up troubled mortgage assets from financial institutions
- BANK DEPOSITS: insured up to $250,000 per account. The Treasury can lend an unlimited amount to the bank insurance agency to ensure depositors in failed banks are repaid.
- Securities regulators can suspend mark-to-market accounting, blamed for forcing financial institutions into insolvency when market value of assets plunge or are unknown
UNITED KINGDOM - 400 billion pounds ($691 billion)
- BANK CAPITAL: UK government can inject up to 50 billion pounds ($87.8 billion) capital into banks, half of the sum would be preference shares or permanent interest bearing shares.
- GUARANTEE INTER-BANK BORROWING: UK government will guarantee about 250 billion pounds ($439 billion) in short- and medium-term borrowing by banks
- LIQUIDITY: Bank of England to lend banks at least 200 billion pounds ($351 billion) via auctions to make sure banks have enough cash to operate. This doubles its existing liquidity auctions and is in addition three-month sterling and one-week dollar auctions.
GERMANY - reportedly 400 billion euros ($549 billion)
The German government is working on a British-style plan to be adopted in the next few days with the following features, according to media reports in Germany:
- BANK CAPITAL: Germany may inject capital into banks on short-term basis, possibly in return for equity stake that could total 50 billion to 100 billion euros
- GUARANTEE INTER-BANK BORROWING: Lending between banks could be insured in a program worth hundreds of billions of euros
IRELAND - 400 billion euros ($549 billion)
- BANK CAPITAL: the government can take a stake in any of the six banks covered by its plan
- BANK DEPOSITS: guaranteed in its six banks, plus any other liabilities
JAPAN
- May consider injecting capital into banks
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