CBC: As U.S. moves to buy bank stock, Europeans plan to guarantee loans

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As U.S. moves to buy bank stock, Europeans plan to guarantee loans

Struggling to contain a credit crisis. European countries have reached a deal to guarantee future loans among private banks and Washington is set to buy ownership stakes in a broad array of American banks. The Associated Press reported Sunday that a draft declaration by the 15 eurozone governments says they will guarantee new loans between private institutions for five years. The governments — representing the countries that use the euro — were meeting in Paris to work on a co-ordinated response to the global financial crisis.

In Washington, U.S. Treasury Secretary Henry Paulson said late Friday the government will buy stock in U.S. financial firms to help them raise desperately needed money. French President Nicolas Sarkozy included British Prime Minister Gordon Brown in Sunday's meeting, even though Britain does not use the euro.