Brown urges EU to match guarantee of inter-bank lending (AFP)
09.10.2008 00:16 Business
In a letter to French President Nicolas Sarkozy and copied to EU leaders and the European Commission, Brown outlined the rescue package announced by his government Wednesday and said a "concerted international approach" was needed.
The government is making 50 billion pounds available to buy preference shares in banks, along with 200 billion pounds in short-term loans and another 250 billion to guarantee loans between banks.
"The market for medium term funding is currently frozen across the globe, with potentially serious economic consequences," Brown wrote in the letter, obtained by French newspaper Le Monde and seen by AFP.
"Our scheme aims to restart the market by restoring confidence that loans to financial institutions will be repaid."
He outlined the details of the guarantee, which will cover "new short and medium term debt issuance" adding: "This is an issue which affects us all.
"A concerted approach with national schemes respecting the above basic principles would address this problem."
At an earlier press conference on the package, Brown said he had spoken Wednesday to Sarkozy, whose country currently holds the rotating EU presidency.
"We have invited other European countries to consider proposals we have put to them this morning on medium term funding (and) are in active consultation about how we can adopt a European-wide funding plan," he said.
He said Britain was also talking to other Group of Seven (G7) and G20 governments about a meeting of heads of government, adding: "We are ready to put British proposals to such a meeting."
"Countries are tested in difficult times. These problems certainly started in the United States of America but they are having a big impact on our and on others' financial systems."
Aides to Sarkozy confirmed the French president had spoken to Brown late Tuesday and early Wednesday, but mainly about Britain's rescue plan.
Brown "did not propose a European plan as such", they said, adding: "He simply said 'look at what we're doing, it could interest you'."
Add comment