Lagarde denies bank plan

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French finance minister denies planning a EUR 300B rescue package for European banks.

2 October 2008

LONDON -- French Finance Minister Christine Lagarde denied Wednesday that Paris wanted a EUR 300 billion rescue package to prevent the collapse of European banks, saying "there is no such a thing".
"As for the fund, the plan for a fund, is concerned, there is no such a thing", Lagarde told BBC television after being asked about a report from a European source in Berlin that France proposed the idea.
A source at the finance ministry in Paris earlier said the ministry "categorically denies" that it wanted to such a proposal.
The package was to be summarized at a meeting of the leaders of Britain, France, Germany and Italy in Paris on Saturday, the European source said.
"I certainly believe that Europe and the US have to benefit from the same level playing field", Lagarde told BBC's Newsnight programme.
But she stressed the key issue was to do "not with a fund but it has to do with accounting rules".
"I really believe that we need to make progress towards a level playing field when it comes to accounting rules and when it comes to recording what is in the balance sheets of banks and this is not currently the case", she said.
Lagarde said late September’s bailouts of banks Dexia and Fortis by several European governments showed a "very decent level of coordination and a very decent level of cross-sharing of information".
But she said this could be improved, and noting Ireland's announcement that it would guarantee all deposits in six main banks, said: "A measure decided in one member state has to be shared in advance with other member states.
"Because when something happens in one member state it affects everybody else around, so there needs to be that level of cross-sharing of information".

[AFP / Expatica]

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