From CPN’s Morning Newsletter–Columbus Day Discovery: Global Recapitalization
- Oct 13, 2008
As CPN reported exclusively in our Daily News REport Morning Edition(subscribe here), with a shoutout to Bette Davis, it’s been a bumpy weekend. First off, is it just us, or does recapitalizing every bank in the world sound a bit like global socialism?No matter, after a Saturday of President Bush and G-7 platitudes, as reported by CPN, world leaders got busy with specific action plans. On the heels of Britain’s and the United States’ pay-for-equity bank-bailout plans, Germany and France announced Sunday respective pledges to take equity stakes in distressed banks and to guarantee bank lending for periods up to five years. Although the measures are concrete, each country in the EU, and elsewhere in Europe, will still act independently. That said, all pointed out that global coordination is essential, so that one nation’s plan doesn’t undercut another’s economy. The actions are aimed at jump-starting now-frozen interbank lending and to open up the similarly paralyzed commercial paper market. Unlike Britain, which has earmarked $225 billion, and the U.S. with its $700 billion package, no others have put a pricetag on their measures just yet. Some estimates are out there, though. Germany may soon embark on a plan that will cost up to $536 billion, according to The New York Times. France’s effort, the paper estimated, could be 100 billion euros.Norway, not in the euro zone, will be putting $58 billion into keeping banks liquid, according to Reuters. And down under, Australia and New Zealand are guaranteeing bank deposits–to avoid capital flight. CPN will continue its ongoing reporting on the markets and the bailout efforts around the globe later today. If you would like to partake of our Upcoming News digest with your morning coffee, please subscribe to ourDaily News REport Morning Edition.