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World Financial Leaders Agree on Plan to Restore Confidence in Markets

  • VOA News

European leaders have agreed on a plan they hope will encourage banks to lend money and will help safeguard financial institutions from collapse.

French President Nicolas Sarkozy said after a summit in Paris Sunday that the governments of 16 European countries agreed to guarantee new inter-bank loans for up to five years. The government loan guarantee is among several measures adopted at the meeting of the 15 members of the European Union's "euro bloc" plus British Prime Minister Gordon Brown.

Mr. Sarkozy said no country acting alone would be able to do anything constructive during this global economic crisis.

Leaders of all 27 EU members are expected to examine the agreement when they meet in Brussels Wednesday.

The European summit came on the same day that World Bank and International Monetary Fund officials in Washington agreed to protect poor and vulnerable countries during the financial crisis.

IMF Director Dominique Strauss-Kahn said the economic crisis puts additional strain on countries already suffering from rising fuel and food prices.

Strauss-Kahn also called the emergency measures announced by the European countries very positive.

In Asia Sunday, Taiwan's government announced it is extending a ban on short-selling stocks and limiting how far shares can decline.

The Indonesian government also announced its stock market will resume trading Monday. Officials suspended trading for three days last week, following a sharp fall in share prices.

The global economic crisis began with a drop in the U.S. housing market and the inability of some Americans to repay their home loans. Several high-profile financial companies that invested in these loans collapsed, and many banks now are reluctant to lend money to consumers, businesses and each other.

Major European governments and the United States have stepped in to take control of some sinking lenders, but at great expense to taxpayers.

The crisis has sent stock indexes plunging around the world.

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