Following measures taken by European governments to protect banks from the financial crisis, French PM Francois Fillon announced Wednesday that the government would create a new "legal structure" to save failing banks.
France's Prime Minister Francois Fillon asked lawmakers Wednesday to give legal backing to his government's promise to step in rapidly to support failing banks with cash bail-outs.
France's new programme is the latest in a patchwork of emergency measures taken by European governments to protect banks from the financial meltdown, ranging from deposit guarantees to full nationalisations.
Addressing a parliamentary debate on the banking crisis, Fillon said France had already stepped in to partly buy out the failing Franco-Belgian bank Dexia as an emergency measure but wanted a "legal structure" for future rescues.
"In order that it can have all the necessary capital to hand for any future interventions that prove necessary, the government will ask parliament to vote to attach an explicit state guarantee to the finance bill," he said.
"We wanted to create the conditions for confidence to return to the banking system and ensure that banks start lending to each other once again," he said.
President Nicolas Sarkozy has pledged that no French bank will be allowed to collapse amid the recent financial crisis, despite a squeeze on liquidity that has seen interbank lending grind to a halt and sent shares into a tailspin.
Date created : 2008-10-08