In Paris, the French government was expected to propose a state guarantee for endangered banks, a ruling party lawmaker said.
Elsewhere, Australia, New Zealand, Portugal and the United Arab Emirates all moved to guarantee bank deposits and Norway said it would issue up to 41 billion euros in bonds to pay for measures to support banks.
World Bank president Robert Zoellick said the financial crisis, the worst since the 1929 market crash, underscored the need for coordinated action to “modernize multilateralism for a new global economy.”
Coordination against the crisis is considered vital to prevent the actions of one country harming another and exacerbating the bank solvency and credit shortage problems.
European central banks said yesterday they would provide unlimited amounts of dollar loans over periods ranging from one week to 84 days.
The Bank of England, the European Central Bank and the Swiss National Bank will make US dollar loans for periods of seven, 28 and 84 days “at fixed interest rates for full allotment,” a European Central Bank statement said.
“The Bank of Japan will be considering the introduction of similar measures,” it said.
The decision was part of a fresh push by the central banks in Europe along with the US Federal Reserve and Bank of Japan to boost the supply of dollars in stressed markets.
By providing unlimited amounts of dollars to commercial banks, referred to as counterparties, the banks aimed “to improve liquidity in short-term US dollar funding markets,” the statement said.
“Counterparties in these operations will be able to borrow any amount they wish against the appropriate collateral in each jurisdiction,” the central banks said.
They said they “will continue to work together and are prepared to take whatever measures are necessary to provide sufficient liquidity in short-term funding markets.”
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