European govts race to help banks amid crisis

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Oct 6: said, in a bid by Europe's biggest economy to prevent a rush of withdrawals. Until now, German savings accounts, including those of small, privately held companies, have been guaranteed by 180 banks in Germany, the BDB private banks group said on Oct. 2. The guarantees of the banks covered 90 % of an account's balance to a maximum of 20,000 euros, the group said.

Denmark said Monday commercial lenders will provide as much as 35 billion kroner ($6.4 billion) over the next two years to a fund to insure depositors against losses. Sweden will double the guarantee on bank deposits to 500,000 kronor ($69,500), while UK Chancellor of the Exchequer Alistair Darling said Britain is "ready to do whatever it takes'' to help its banks. The commitments follow similar verbal pledges by Sarkozy and Italian Prime Minister Silvio Berlusconi both of whom have promised to prevent losses for depositors in their countries. Ireland is guaranteeing banks' deposits and debts for two years. Amid the race to shore up Europe's faltering financial institutions, BNP Paribas, France's biggest lender, agreed to take control of Fortis's units in Belgium and Luxembourg.

The sale comes after a Sept. 28 bailout failed to stabilize what was Belgium's biggest financial-services firm, as clients withdrew money and the company had trouble obtaining loans. Fortis received an 11.2 billion euro capital injection from Belgium, the Netherlands and Luxembourg.

The Belgian government will have an 11.6 % stake in BNP Paribas and Luxembourg a 1.1 % holding, after the purchases are completed, BNP Paribas said in a statement on Monday. On Oct 3, the Dutch government took control of Fortis's units in the Netherlands for 16.8 billion euros after deciding the initial rescue didn't go far enough.