U.K. to Follow U.S., Inject Capital Into Banks
In the most recent of a series of globally coordinated efforts to stabilize financial sectors and "guarantee inter-bank lending," European leaders agreed Sunday to inject unspecified amounts of euros into the banking sector, according to a Monday report by the Los Angeles Times. Global stocks responded positively to the announcement, jumping in early trading Monday, according to a New York Times report. U.S. stocks responded similarly to Department of the Treasury secretary Henry Paulson's announcement Friday that the government would directly purchase stakes in banks and financial institutions as part of the $700 billion financial rescue package. "We are developing strategies...to purchase equity in financial institutions, as deemed necessary to promote financial market stability," Paulson said Friday. The Dow Jones Industrial Average (INDU) opened 416 points up Monday from Friday's 1,000-point roller coaster, which briefly took the Dow below 8,000. The first steps in the global plan rolled out Monday just days after the Group of Seven (G7) finance ministers and central bank governors finalized what Paulson called "an aggressive action plan to address the turmoil in global financial markets and the stresses on our financial institutions." "It is critical for governments to continue to take individual and collective actions to provide much-needed liquidity, strengthen financial institutions, enhance market stability, and develop a comprehensive regulatory response," he said. "We must continue to closely coordinate our actions and work within a common framework so that the action of one country does not come at the expense of others or the stability of the system as a whole." Disclosure: The author held no relevant positions when this story was published. Indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade. Editor’s Note: To contact the reporter on this story, email firstname.lastname@example.org.