The French government’s financial arm will grant an emergency loan of up to 10 billion euros (US$12.8 billion) to the country’s banks to help them weather the global financial crisis, newspapers reported yesterday.
The Deposits and Consignation Fund (CDC) will make a first bridging loan of 5 billion euros to a refinancing company formed to support French banks, the financial dailies Les Echos and La Tribune reported without citing any sources.
The CDC would be reimbursed through stocks from the refinancing company.
A second 5 billion euro loan will be made available on Oct. 31 if the banks still have a pressing need for cash, La Tribune reported. The loan would have to be repaid by Dec. 31.
Seven banks — BNP Paribas, Banque Populaire, Caisses d’Epargne, Credit Agricole, Credit Mutuel, HSBC and Societe Generale — will be eligible for the loan.
The Economy Refinancing Co was created to borrow money through bonds, with state guarantee, and in turn loan that money at a higher rate to banks lacking financing.
France announced on Monday it would make 10.5 billion euros available to leading banks to boost economic activity in the global credit squeeze.
Lawmakers last week approved a 360 billion euro overall package to support French banks. Several European countries also agreed to plough capital into the hardest-hit banks and massively underwrite loans between financial players.
Under that plan, the French state would provide 40 billion euros to recapitalize fragile banks. It would also make available up to 320 billion euros in inter-bank loan guarantees.
Meanwhile, the Brazilian government announced on Wednesday it will allow two state-controlled banks to buy stakes in private financial institutions, hoping to limit damage from the global crisis.
The Banco do Brasil and Caixa Economica Federal will be able to buy stakes in other banks, insurance firms and other private institutions needing aid, Brazilian Finance Minister Guido Mantega said.
“We want to facilitate liquidity and give more alternatives to the private institutions,” he said.
The institutions previously were not allowed to seek help from the state-controlled banks.
The provisional measure signed late on Tuesday by Brazilian President Luiz Inacio Lula da Silva also lets the central bank swap currency with other central banks across the world.
“It’s a preventive measure,” central bank President Henrique Meirelles said. “Right now there is no need for that, but it is an instrument we are making available.”
Mantega reiterated that Brazil’s financial system is “solid” and that “banks are not going bankrupt.”
On Tuesday, Lula said for the first time that the world economic crisis might eventually force changes in Brazil’s budget.
Tropical Storm Gaemi strengthened into a typhoon at 2pm yesterday, and could make landfall in Yilan County tomorrow, the Central Weather Administration (CWA) said yesterday. The agency was scheduled to issue a sea warning at 11:30pm yesterday, and could issue a land warning later today. Gaemi was moving north-northwest at 4kph, carrying maximum sustained winds near its center of up to 118.8kph and gusts of 154.8kph. The circumference is forecast to reach eastern Taiwan tomorrow morning, with the center making landfall in Yilan County later that night before departing from the north coast, CWA weather forecaster Kuan Shin-ping (官欣平) said yesterday. Uncertainty remains and
SEA WARNING LIKELY: The storm, named Gaemi, could become a moderate typhoon on Wednesday or Thursday, with the Taipei City Government preparing for flooding A tropical depression east of the Philippines developed into a tropical storm named Gaemi at 2pm yesterday, and was moving toward eastern Taiwan, the Central Weather Administration (CWA) said. Gaemi could begin to affect Taiwan proper on Tuesday, lasting until Friday, and could develop into a moderate typhoon on Wednesday or Thursday, it said. A sea warning for Gaemi could be issued as early as Tuesday morning, it added. Gaemi, the third tropical storm in the Pacific Ocean this typhoon season, is projected to begin moving northwest today, and be closest to Taiwan on Wednesday or Thursday, the agency said. Today, there would likely
DISRUPTIONS: The high-speed rail is to operate as normal, while several airlines either canceled flights or announced early departures or late arrivals Schools and offices in 15 cities and counties are to be closed today due to Typhoon Gaemi, local governments announced last night. The 15 are: Taipei, New Taipei City, Taoyuan, Tainan, Keelung, Hsinchu and Kaohsiung, as well as Yilan, Hualien, Hsinchu, Miaoli, Chiayi, Pingtung, Penghu and Lienchiang counties. People should brace for torrential rainfall brought by the storm, with its center forecast to make landfall on the east coast between tonight and tomorrow morning, the Central Weather Administration (CWA) said. The agency issued a sea warning for the typhoon at 11:30pm on Monday, followed by a land warning at 11:30am yesterday. As of
CASUALTY: A 70-year-old woman was killed by a falling tree in Kaohsiung as the premier warned all government agencies to remain on high alert for the next 24 hours Schools and offices nationwide are to be closed for a second day today as Typhoon Gaemi crosses over the nation, bringing torrential rain and whipping winds. Gaemi was forecast to make landfall late last night. From Tuesday night, its outer band brought substantial rainfall and strong winds to the nation. As of 6:15pm last night, the typhoon’s center was 20km southeast of Hualien County, Central Weather Administration (CWA) data showed. It was moving at 19kph and had a radius of 250km. As of 3pm yesterday, one woman had died, while 58 people were injured, the Central Emergency Operation Center said. The 70-year-old