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World Markets Gain As Banks Offered Help

  • VOA News

Governments around the world are moving to rescue banks with huge bailouts to prevent an international recession.

France, Germany, Spain, and Austria have pledged more than one trillion dollars to buy part ownership in some banks and guarantee some loans.

These and other governments are trying to get financial companies to resume lending and restart the stalled credit market.

Credit markets showed signs of recovery, as a key interest rate (called the Libor) eased downward, making it less difficult for banks to lend to each other.

World markets soared today (Monday) in response to the economic rescue plans. Stock markets in the United States, Hong Kong and Europe rose between six and 12 percent, reversing some of the recent huge losses.

The United States says it is moving quickly to get its 700-billion-dollar rescue plan running.

The Bush administration has named interim managers and is consulting with legal experts to find the best way to buy faltering investments, as well as an ownership stake in some banks.

Germany's government announced a rescue plan worth more than 600 billion dollars today (Monday) to offer fresh money to banks and guarantee some loans.

The French government is pledging tens of billions of dollars to troubled banks to encourage lending. The British government says it will make more than 63-billion dollars available to three major banks (The Royal Bank of Scotland, Lloyds, HBOS).

Many of the details of the governments' actions were worked out in crisis talks over the past few days in Washington and Paris.

There may be more gatherings of key leaders to address the financial crisis. Italian Prime Minister Silvio Berlusconi said he and President Bush discussed a possible gathering of G-8 leaders soon. And British Prime Minister Gordon Brown says it is time for world leaders to craft a new international financial system that better reflects the growing global reach of banking and economics.

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