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FACTBOX-Financial rescue plans by G7 and other countries

Mon, Nov 10 2008, 15:33 GMT
http://www.afxnews.com

Nov 10 (Reuters) - Governments around the world are announcing rescue plans to support banks and unfreeze credit markets.

Over $5 trillion has been committed to bailing out the financial sector, while regulatory reforms loom and signs of a worldwide recession mount..

Below are details of plans announced by governments (in alphabetical order):

G7 COUNTRIES:

FRANCE - 360 billion euros ($462.8 billion)

- BANK CAPITAL: Up to 40 billion euros available to help recapitalise banks. State to lend 10.5 billion euros to France's top six banks by year-end. Banks to pay interest rate of more than 400 basis points over risk-free rate. Government has said it may take direct stakes if the banks in question do not begin lending to companies.

- GUARANTEE INTERBANK BORROWING: Up to 320 billion euros to be made available to guarantee bank lending. The fund will guarantee bank paper issued before Dec 31, 2009, and lasting up to five years.

- BANK DEPOSITS: Guaranteed up to 70,000 euros.

GERMANY - 515 billion euro ($664.1 billion)s

- BANK CAPITAL: A maximum of 80 billion euros is available for recapitalisations, while 20 billion is set aside as a provision for the guarantee offer. Each bank in the scheme will be allowed recapitalisation of up to 10 billion euros, and the fund will assume risk of up to 5 billion euros per bank.

Commerzbank became the first to apply for state funds, taking 8.2 billion euros.

- LENDING PROGRAMME: A new 15 billion euro programme will be introduced at state-owned KfW to strengthen its lending until end-2009. KfW to increase funds available to take stakes in young, innovative firms as part of stimulus package.

- GUARANTEE INTERBANK BORROWING: The government will provide 400 billion in guarantees which will run until Dec. 31, 2009.

- BANK DEPOSITS: Unlimited guarantee.

ITALY

- LIQUIDITY: The Italian government said it is ready to swap up to 10 billion euros in government bonds in temporary exchange for other forms of debt held by banks.

- BOND GUARANTEES: The Treasury will guarantee new bonds issued by banks until Dec 31, 2009, with a maturity of up to five years.

- DEBT GUARANTEE: Government said it is ready to underwrite bank debt and savings shares, if asked, without penalising corporate management for requesting help.

- BANK CAPITAL: Cabinet has passed a decree allowing the government to provide capital to banks in exchange for non-voting shares. No bank has yet asked for help from the government. Govt does not intend to hold banks' ordinary capital unless requested.

- BANK DEPOSIT: Guaranteed up to 103,291.38 euros.

JAPAN - 2 trillion yen ($20.62 billion)

- LIQUIDITY: BoJ to increase size/frequency of its commercial paper repo operations and temporarily broaden (until April 2009) the range of asset-backed commercial paper eligible for its market operations. To temporarily ease, until 2012, rules on banks' capital requirements.

- BANK CAPITAL: Existing law allows for recapitalisation of regional banks to encourage lending to small firms. Economics minister says big banks should be able to access public funds as well.

UNITED KINGDOM - 400 billion pounds ($655.9 billion)

- BANK CAPITAL: UK government to inject 37 billion pounds capital into three major banks -- RBS, HBOS and Lloyds TSB -- in the form of preference shares and as shares underwritten by the government. Banks may also access up to one billion pounds a year from the European Investment Bank, the EU's lending arm, to lend to small- and mid-sized businesses.

- GUARANTEE INTERBANK BORROWING: UK government to guarantee about 250 billion pounds in short- and medium-term borrowing by banks.

- LIQUIDITY: Bank of England to lend banks at least 200 billion pounds via auctions to make sure banks have enough cash to operate. This doubles its existing liquidity auctions and is in addition to three-month sterling and one-week dollar auctions.

- BANK DEPOSITS: Guaranteed up to 67,072 euros.

UNITED STATES - $700 billion plan, excluding Federal Reserve programmes

- BANK CAPITAL: The U.S. Treasury will inject $250 billion into qualifying domestic financial institutions, with stakes limited to $25 billion or 3 percent of risk-weighted assets. Half of total already committed to nine banks.

- BAD ASSETS: The Treasury can buy up troubled mortgage assets from financial institutions.

- BANK DEPOSITS: Insured up to $250,000 per account. The Treasury can lend an unlimited amount to the bank insurance agency to ensure depositors in failed banks are repaid.

- ACCOUNTING: Securities regulators can suspend mark-to-market accounting, blamed by critics for forcing financial institutions into insolvency when the market value of illiquid assets plunge or are unknown.

- LIQUIDITY: Federal Reserve operating various liquidity measures up to $900 billion, plus a commercial paper programme, and loans to individual companies like AIG and JPMorgan Chase.

- FED RESERVE PROGRAMME: Will buy up to $600 billion worth of money market mutual fund assets to boost liquidity.

OTHER COUNTRIES:

AUSTRALIA

- BANK DEPOSITS: The government said it will guarantee all new and existing bank deposits for three years. Will impose a fee for guaranteeing deposits of more than A$1 million.

- GUARANTEE WHOLESALE FUNDING: The government will guarantee all wholesale funding to Australian banks for five years.

- LIQUIDITY: A$4 billion ($2.71 billion) will be made available for mortgage-backed securities, to help maintain liquidity for non-bank lenders.

AUSTRIA - 100 billion euros ($128.6 billion)

- BANK CAPITAL: Up to 15 billion euros is earmarked for use as equity stakes. No bank has a legal right to the funds, which will instead be disbursed at the discretion of the Finance Ministry.

- GUARANTEE INTERBANK BORROWING: Up to 75 billion euros will be provided in guarantees for interbank lending. The guarantees will be given to a newly formed clearing house company managed by the banks.

- BANK DEPOSITS: Government has issued a blanket guarantee on savers' bank deposits, and put aside 10 billion euros to guarantee the deposits of small- and medium-sized companies.

BRAZIL

- BANK CAPITAL: Government would allow state-controlled banks Banco do Brasil and Caixa Economica Federal to buy stakes in other financial institutions.

- LIQUIDITY: Has sharply reduced reserve requirements for smaller banks and injected as much as 160 billion reais ($68.41 billion) into the banking sector. Has allowed bigger banks to use some of their reserve requirements to buy loan books of smaller banks.

BULGARIA

- BANK DEPOSITS: Government has increased the minimum bank deposit guarantee to 50,000 euros ($64,280).

- LIQUIDITY: Has eased regulations for banks' minimum reserves, keeping the rate at 12 percent but, as of Oct. 1, counting 50 percent of banks' cash in vault as bank reserves.

CHINA

- BANK CAPITAL: Government injected $19 billion into state-owned Agricultural Bank of China, the country's third-biggest bank by assets, as part of a restructuring. Bailout expected to cost $100 billion in total, due to AgBank's mountain of bad loans.

- LIQUIDITY: Central bank scraps lending quotas. Cuts lending and deposit rates. Lowers reserve requirements. Increases credit quotas for national and regional banks, and directs them to channel the extra loans mainly to smaller firms.

CYPRUS:

- BANK DEPOSITS: Guarantee scheme raised to 100,000 euros ($128,600) from 20,000 euros.

- BANK CAPITAL: Government said banking system is sound and it therefore has no need for a bailout plan, although it stands ready to assist any bank should the need arise.

CZECH REPUBLIC

- BANK DEPOSITS: The government will guarantee deposits up to 50,000 euros ($64,280) but has no other plans to prop up lenders.

DENMARK

- BANK DEPOSITS: Government said it will provide an unlimited guarantee on deposits.

- GUARANTEE INTERBANK LENDING: The guarantee also covers banks' debts to creditors, apart from covered bonds.

- BANK CAPITAL: Danish banks have agreed to contribute up to 35 billion Danish crowns ($6.04 billion) over two years into a liquidation fund to help take over distressed institutions.

GREECE - 28 billion euros ($35.99 billion)

- BANK CAPITAL: The government is prepared to boost the capital of Greek banks by up to 5 billion euros, but has dropped an initial insistence that banks give it preferred shares with voting rights. Banks support the plan, although none have yet taken the government up on its offer.

- GUARANTEE CAPITAL MARKET LOANS: The government will guarantee up to 15 billion euros of capital market loans by banks.

- LIQUIDITY: State also ready to issue 8 billion euros in special bonds to help it inject liquidity into the banks.

- BANK DEPOSITS: Legislation has been introduced to raise the guarantee on bank deposits to 100,000 euros ($136,900) for three years.

HONG KONG

- BANK DEPOSITS: The Hong Kong government said it will provide a blanket guarantee for customer deposit accounts in all HK financial institutions until end-2010. Previously the maximum guarantee was $13,000 per bank per customer.

- BANK CAPITAL: Has set up a contingent fund to inject capital into local banks, if necessary.

HUNGARY

- GUARANTEE INTERBANK LENDING: Government said it would guarantee all of OTP Bank's interbank loans, but OTP declined the offer.

- BANK DEPOSITS: State has issued a blanket guarantee on all bank deposits.

- LIQUIDITY: Has agreed repurchase transactions with the ECB which will allow it borrow up to 5 billion euros to boost liquidity, and has introduced overnight euro swap tenders to ease pressure on interbank trading.

ICELAND

- BANK CAPITAL: The government has taken over banks Kaupthing, Landsbanki and Glitnir

INDIA

- LIQUIDITY: Central bank has made money market ops more flexible; reduced banks' capital reserve ratio; provided 250 billion rupees ($8.84 billion) to lending institutions as part of a farm-loan waiver plan and eased rules for some foreign borrowings.

- BANK CAPITAL: The government is expected to announce plans to help refinance banks to help them raise their capital adequacy ratios to 12 percent.

INDONESIA

- BANK DEPOSITS: Government said it will guarantee up to 2 billion rupiah ($202,000) in bank deposits, up from 100 million rupiah.

IRELAND - 485 billion euros ($623.5 billion)

- BANK DEPOSITS: Banks to pay 1 billion euros over a two-year period to get cover under Ireland's state guarantee plan. The plan covers all retail and corporate deposits, interbank deposits, senior unsecured debt, asset covered securities and dated subordinate debt.

- BANK CAPITAL: Government has said it will only take direct stakes in banks as a last resort.

LATVIA

- BANK CAPITAL: Government has taken over Parex, the country's second-largest bank, after a run on its deposits. Govt injected 200 million lats ($361 million). Says no other banks have asked for help, but it will consider appeals on merit.

- GUARANTEES: Government said it would make available state guarantees for loans taken out by local banks.

LITHUANIA:

- BANK DEPOSITS: Guaranteed up to 100,000 euros.

- LIQUIDITY: Central bank has cut reserve requirements for

commericial banks to 4 percent from 6 percent. Move frees up around 1 billion litas ($372.4 million). Central bank says would do so again.

- GUARANTEES: Government says no bank has asked for liquidity loans or state guarantees.

KAZAKHSTAN - $15 billion

- BANK CAPITAL: Government to inject up to $5 billion into four largest banks. Kazkommerts and Halyk have agreed to sell a 25 pct stake to the government. State will also discuss injections with key foreign shareholders in fifth- and sixth-largest banks. Has also released $10 billion from its national welath fund to stablise the economy over next two years.

- LIQUIDITY: Central bank has relaxed minimum reserve requirements, freeing up an estimated $4 billion.

- BANK DEPOSITS: Government has increased the guarantee on bank deposits to 5 million tenge ($41,720) from 700,000 tenge.

KUWAIT

- LIQUIDITY: Central bank has changed the loan-to-deposit ratio for banks to 85 percent from 80 percent, freeing up 1.2 billion dinars ($4.44 billion) in possible loans.

- BANKS CAPITAL: Government said it has offered funds to banks.

- BANK DEPOSITS: Government said there is no need to guarantee deposits at present, but would act if necessary.

MALAYSIA

- BANK DEPOSITS: The government said it will guarantee all ringgit and foreign currency deposits in banks and financial firms until December 2010.

- LIQUIDITY: The central bank said access to its liquidity facility will be extended to insurance firms and takaful operators that it supervises and regulates.

MONGOLIA

- BANK CAPITAL: Government ready to inject fresh capital, but says banks are adequately capitalised.

MONTENEGRO - 800 million euros ($1.03 billion)

- BANK DEPOSITS: The government is ready to guarantee all personal and banking deposits, which together total over 800 million euros.

- LIQUIDITY: Proposed further central bank measures to increase day-to-day money market liquidity and provide more flexible loans.

- GUARANTEE INTERBANK LENDING: Proposed rescue package also allows for possibility of providing guarantees for interbank lending.

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