Europe Kicks In $2.3 Trillion To Save Banking System

European governments put $2.3 trillion on the line this week, in guarantees and other emergency measures to save the banking system, MSNBC reports. The funds are pledged by Germany, Britain, France, the Netherlands, Spain, Portugal and Austria.

The European governments funds will not go into a collective pot. Instead, governments will decide individually how much to commit to supporting their own banks under broad guidelines. The sums are considered a maximum, and might not all be spent if the financial crisis eases. About $341 billion of the European pledges were earmarked to be spent on recapitalizing banks by buying stakes.

The British government also injected another $63 billion into some of the country’s leading banks hoping to avoid a further collapse. The banks also will be required to lend more money to small- and medium-sized businesses and homeowners in a bid to rescue the country’s housing market. In light of the news, stock markets rebounded worldwide early this week, after the European decision and other efforts to find solutions to the financial crisis. ❖