France unveils 360-billion-euro bank rescue plan
Posted: 13 October 2008 2240 hrs

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PARIS - French President Nicolas Sarkozy on Monday announced a 360-billion-euro bail-out plan to pump capital into the country's banks and underwrite loans between them.

France will guarantee up to 320 billion euros of interbank loans taken out until December 2009, and set aside up to 40 billion euros to recapitalise French banks, Sarkozy said.

"Nothing will be spared to prevent the crisis getting any worse," Sarkozy told journalists at the Elysee Palace in Paris, a day after 15 European nations met there to draw up a coordinated strategy to end the credit crunch.

"Money is not circulating anymore. We have to create the conditions to get it moving again. The greatest danger is not to take risks, it is to do nothing," Sarkozy said.

"The state will bring its guarantee to the loans that banks require," he said.

The president told reporters the state loan guarantee would be charged to banks at commercial rates, and that beneficiaries would have to sign up to certain "ethical" obligations including on executive pay.

- AFP/ir