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Global Bankers Anxiously Watch U.S.
Lenihan called on the European Union to agree on a "common standard of protection" for bank deposits. "We are a small, exposed economy," he said of his country, "more globally exposed than any economy in the E.U."
In recent days, France's president has conducted a flurry of meetings and speeches to address the credit crisis. But Sarkozy has not come up with any concrete proposals to restore order in the markets or prevent other bank failures.
His aides conceded Tuesday that for the moment, the French government was mainly occupied with trying to head off catastrophe.
Last week, Sarkozy proposed holding a global financial summit by the end of the year, after the U.S. presidential election. But reports in Paris said the idea stalled after he received a lukewarm response from President Bush.
Meanwhile, Sarkozy called in the chief executives of nine major French banks to meet with him at the Elysee Palace on Tuesday morning along with Prime Minister François Fillon, Finance Minister Christine Lagarde and Noyer, the Bank of France chief. The main purpose was to ensure that the crisis does not choke the French economy by cutting off credit to businesses and consumers, according to Sarkozy aides.
Georges Pauget, director general of Credit Agricole and head of the French Banking Federation, tried to reassure shareholders and depositors after the meeting, saying the government is ready to act if necessary to bolster weak banks. "The whole French array is solid, diversified, and it benefits from the support of public authorities."
The summit that Sarkozy called for Tuesday would bring together political leaders of the Western European members of the Group of Eight industrialized countries. As described in Paris, the meeting would help restore confidence in European banks and lay the groundwork for a broader international conference to revamp the world monetary system.
Many European leaders said they were horrified at the political infighting that has marked the U.S. Congress's handling of the rescue plan. "I feel they've taken leave of their senses," said Peter Mandelson, the E.U. trade commissioner. "I hope that in Europe, we will not see politicians and parliamentarians replicating the sort of irresponsibility and political partisanship that we have seen in Washington."
In Britain, Prime Minister Gordon Brown called Monday's vote in the House "very disappointing." His chief rival, David Cameron, leader of the Conservative Party, said Europe needed to learn from Washington's mistakes. "Today is a time for us to send a clear message to our political opponents and the country: Let us not allow the political wrangling that took place in America to happen here," Cameron said.
Britain is drafting legislation that would make it easier for the government to step in and save failing lenders. The government is also considering a plan to guarantee private bank deposits up to $90,000, up from the current maximum of $63,000.
So far, however, the European approach has been fragmented. Only 15 of the 27 E.U. member countries use the common currency, the euro.
Lacking ability to fashion a unified response, officials at the headquarters of the E.U. in Brussels pointed their fingers back at Washington, alternately lecturing and pleading with their U.S. counterparts to act.