In the largest such plan, closely modelled on last week's British initiative, Germany said it would issue up to €400bn in credit guarantees for inter-bank lending and set aside a €100bn fund to inject capital in financial institutions and acquire illiquid assets.
Paris will guarantee up to €320bn in inter-bank loans and provide €40bn in new capital for banks. Christine Lagarde, French finance minister, said French banks should use the funds to raise their tier-one capital ratios to 9 per cent, so that they are on “a level playing field” with British banks.
The Netherlands, Spain, Italy, Austria and Portugal joined the effort, committing a total of €440bn in guarantees and capital, while the British government said it would provide £37bn ($64bn) in new capital to three of the country's largest banks – as part of its already announced £400bn bail-out plan.