Europe pushed to produce its own rescue plans
Three major lenders were rescued on Monday as the global credit crisis spread.
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"It may not be the perfect policy response to what ails the system but it's the only one on offer," Mr. Lenhoff adds.Skip to next paragraph
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European leaders have welcomed the American rescue plan, while making it clear that they do not see a multiparty, pan-European response as the appropriate way to deal with failing banks here. French President Nicolas Sarkozy, who is due to huddle with French bank chiefs on Tuesday, said simply: "We must not give way in the face of destabilization. We have to support the banks."
British Prime Minister Gordon Brown, who offered his support in person to President Bush last week, noted that the American economy "is different from Britain," and that "each country will do what is necessary for their country to deal with the problems in different ways."
Ready examples were available across the continent on Monday.
The Belgian, Dutch, and Luxembourg governments agreed to funnel 11.2 billion euros ($16.4 billion) into the cross-border banking and insurance company Fortis to save it after its stock plummeted.
Britain cobbled together a deal for Bradford and Bingley, its leading buy-to-let mortgage provider. Its 197 retail branches will be sold to Spanish banking giant Santander, while the British government will take over its loans at a cost of £41 billion (roughly $80 billion) to the taxpayer.
Iceland, Denmark, and Russia all arranged smaller bank rescues of their own, while Germany orchestrated a 35-billion-euro loan for Munich-based lender Hypo Real Estate. Trading in shares of UniCredit, an Italian bank, were suspended.
European banks are suffering from the twin factors hitting US counterparts: the toxic subprime loans that were sold worldwide and are leaving large holes in balance sheets, and secondly, no one can borrow their way out of trouble because no one will lend cash when they don't know who is about to go bust next.
Loss of customer confidence, such as that which hit Britain's Bradford and Bingley and Northern Rock bank before it, merely compounds the woes.