FACTBOX: Financial rescue plans by G7 and other countries
(Reuters) - Governments around the world are announcing rescue plans to support banks and unfreeze credit markets. [nCRISIS]
Over $3 trillion has been committed to bailing out the financial sector, while regulatory reforms loom and signs of a worldwide recession mount. [nSNAPSHOT].
Below are details of plans announced by governments (in alphabetical order):
FRANCE - 360 billion euros ($492 billion)
- BANK CAPITAL: Up to 40 billion euros available to help recapitalise banks. State to lend 10.5 billion euros to France's top six banks by year-end. Banks to pay interest rate of more than 400 basis points over risk-free rate.
- GUARANTEE INTERBANK BORROWING: Up to 320 billion euros to be made available to guarantee bank lending. The fund will guarantee bank paper issued before Dec 31, 2009, and lasting up to five years.
GERMANY - 500 billion euros ($680 billion)
- BANK CAPITAL: A maximum of 80 billion euros is available for recapitalizations, while 20 billion is set aside as a provision for the guarantee offer. Each bank in the scheme will be allowed recapitalization of up to 10 billion euros, and the fund will assume risk of up to 5 billion euros per bank.
- GUARANTEE INTERBANK BORROWING: The government will provide 400 billion in guarantees which will run until December 31, 2009.
- LIQUIDITY: The Italian government said it is ready to swap up to 10 billion euros in government bonds in temporary exchange for other forms of debt held by banks.
- BOND GUARANTEES: The Treasury will guarantee new bonds issued by banks until Dec 31, 2009, with a maturity of up to five years.
- LIQUIDITY: BoJ to increase size/frequency of its commercial paper repo operations and temporarily broaden (until April 2009) the range of asset-backed commercial paper eligible for its market operations.
- BANK CAPITAL: Existing law allows for recapitalization of regional banks to encourage lending to small firms. Economics minister says big banks should be able to access public funds as well.
UNITED KINGDOM - 400 billion pounds ($691 billion)
- BANK CAPITAL: UK government to inject 37 billion pounds capital into three major banks -- RBS, HBOS and Lloyds TSB -- in the form of preference shares and as shares underwritten by the government.
- GUARANTEE INTERBANK BORROWING: UK government to guarantee about 250 billion pounds in short- and medium-term borrowing by banks.
- LIQUIDITY: Bank of England to lend banks at least 200 billion pounds via auctions to make sure banks have enough cash to operate. This doubles its existing liquidity auctions and is in addition to three-month sterling and one-week dollar auctions.
UNITED STATES - $700 billion plan, excluding Federal Reserve programs
- BANK CAPITAL: The U.S. Treasury will inject $250 billion into qualifying domestic financial institutions, with stakes limited to $25 billion or 3 percent of risk-weighted assets. Half of total already committed to nine banks.
- BAD ASSETS: 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.
- ACCOUNTING: Securities regulators can suspend mark-to-market accounting, blamed by critics for forcing financial institutions into insolvency when the market value of illiquid assets plunge or are unknown.
- LIQUIDITY: Federal Reserve operating various liquidity measures up to $900 billion, plus a commercial paper program, and loans to individual companies like AIG and JPMorgan Chase.
- BANK DEPOSITS: The government said it will guarantee all new and existing bank deposits for three years.
- GUARANTEE WHOLESALE FUNDING: The government will guarantee all wholesale funding to Australian banks for five years.
- LIQUIDITY: A$4 billion ($2.74 billion) will be made available for mortgage-backed securities, to help maintain liquidity for non-bank lenders.
AUSTRIA - 100 billion euros ($134.7 billion)
- BANK CAPITAL: Up to 15 billion euros is earmarked for use as equity stakes. No bank has a legal right to the funds, which will instead be disbursed at the discretion of the Finance Ministry.
- GUARANTEE INTERBANK BORROWING: Up to 75 billion euros will be provided in guarantees for interbank lending. The guarantees will be given to a newly formed clearing house company managed by the banks.
- BANK DEPOSITS: Government has issued a blanket guarantee on savers' bank deposits, and put aside 10 billion euros to guarantee the deposits of small- and medium-sized companies.
- BANK DEPOSITS: Government has increased the minimum bank deposit guarantee to 50,000 euros ($67,350).
- BANK DEPOSITS: Guarantee scheme raised to 100,000 euros ($136,300) from 20,000 euros.
- BANK DEPOSITS: The government will guarantee deposits up to 50,000 euros ($67,350) but has no other plans to prop up lenders.
- BANK DEPOSITS: Government said it will provide an unlimited guarantee on deposits.
- GUARANTEE INTERBANK LENDING: The guarantee also covers banks' debts to creditors, apart from covered bonds.
- BANK CAPITAL: Danish banks have agreed to contribute up to 35 billion Danish crowns ($6.33 billion) over two years into a liquidation fund to help take over distressed institutions.
GREECE - 28 billion euros ($38.25 billion)
- BANK CAPITAL: The government is prepared to boost the capital of Greek banks by up to 5 billion euros through the purchase of preferred shares with voting rights.
- GUARANTEE CAPITAL MARKET LOANS: The government will guarantee up to 15 billion euros of capital market loans by banks.
- LIQUIDITY: State also ready to issue 8 billion euros in special bonds to help it inject liquidity into the banks.
- BANK DEPOSITS: Legislation has been introduced to raise the guarantee on bank deposits to 100,000 euros ($136,900) for three years.
- BANK DEPOSITS: The Hong Kong government said it will provide a blanket guarantee for customer deposit accounts in all HK financial institutions until end-2010. Previously the maximum guarantee was $13,000 per bank per customer.
- BANK CAPITAL: Has set up a contingent fund to inject capital into local banks, if necessary.
- GUARANTEE INTERBANK LENDING: Government said it would guarantee all of OTP Bank's interbank loans, but OTP declined the offer.
- BANK DEPOSITS: State has issued a blanket guarantee on all bank deposits.
- LIQUIDITY: Has agreed repurchase transactions with the ECB which will allow it borrow up to 5 billion euros to boost liquidity, and has introduced overnight euro swap tenders to ease pressure on interbank trading.
- BANK CAPITAL: The government has taken over banks Kaupthing, Landsbanki and Glitnir
- LIQUIDITY: Central bank has made money market ops more flexible; reduced banks' capital reserve ratio; provided 250 billion rupees ($8.84 billion) to lending institutions as part of a farm-loan waiver plan and eased rules for some foreign borrowings.
- BANK CAPITAL: The government is expected to announce plans to help refinance banks to help them raise their capital adequacy ratios to 12 percent.