There has been decisive action to confront the global financial crisis in Europe, with an agreement on a 14 point plan to protect share markets.
15 European Union leaders have met in Paris to discuss the crisis, announcing hundreds of billions of dollars of new initiatives.
It's hoped the plan which includes a guarantee of new medium term loans between private banks will restore confidence within days.
French President Nicolas Sarkozy says the plan will safeguard banks from collapse.
“The governments of the Euro zone will provide a public guarantee for the re-financing operations for the banks.
“This temporary measure, limited until the 31st December, 2009, will be paid for at market conditions… we are enabling them to operate because our economies depend on it.”
It follows a Federal Government guarantee on all bank deposits in Australia aimed at restoring confidence here.
UK Prime Minister Gordon Brown says he expects confidence in the banking system to be restored 'in the next few days', as a result of the joint action.
“I’m confident after talking to my European colleagues that they agree that the three elements of the plan that we have put forward – that is more liquidity, funding for the medium term loans that are necessary for businesses and for mortgages to be delivered, and also the recapitalisation of banks are part of their thinking as well.”
