The world's economic powers tried to contain the financial crisis as panic swept through European and Asian markets. Liquidity injections and interest rate cuts seem to have failed.
The insurance company will be provided with a loan of $37.8 billion by the Federal Reserve. The deal comes after a punishment for organizing a posh event just days after getting economic help.
The fact that banks cut their key interest rates by a half-percentage point did not help. Anyway, stock index futures drifted higher in early trade on Thursday.
The surprise announcement set off volatile trade in global stock markets, which have seen trillions of dollars in wealth wiped out over the past year. But it failed to win a ringing endorsement from any one market.
Banking stocks are among the biggest fallers across European markets, with Credit Suisse AG, BNP Paribas SA and Societe Generale some of the worst hit.
A 50 billion-pound package. Separately, Prime Minister Gordon Brown says Britain will take legal action against Icelandic authorities to recover money held by British savers in U.K. branches of troubled Icelandic banks.
Zapatero said the fund could be extended to 50 billion euro if necessary but stressed the government would not be buying up bad debt like the rescue plan recently passed by the United States Congress.
In a joint statement, EU finance ministers said they “all commit to take all necessary measures to enhance the soundness and stability of our banking system and to protect the deposits of individual savers.”
Home to just 300,000 people, Iceland used emergency powers rushed through on Monday to dismiss the board of directors of Landsbanki and put the bank in receivership.
