Global banks bolstered to fight crisis

By Tamora Vidaillet and Huw Jones

PARIS (Reuters) - Nations from Europe to Australia rushed out plans on Sunday to shore up their banks, trying to halt a markets crash with pledges to back lending, buy stakes in financial institutions and take other emergency steps.

European leaders meeting in Paris said their line of attack would help halt the chaos that has frozen credit markets, the lifeblood of the financial system, redrawn the world's financial industry and threatened a global recession.

"I believe that we will see over the coming few days worldwide action that will make people see that confidence in the banking system can be restored," Prime Minister Gordon Brown told reporters.

In Washington, the United States worked on ways to buy stakes in struggling banks and other financial firms, something unthinkable until recently for the world's largest economy.

The U.S. Standard & Poor's 500 index plunged more than 18 percent last week, its worst-ever weekly fall. European stocks fell 22 percent and Tokyo's Nikkei crashed 24 percent.

Markets gave an initial cheer to the moves to check the slump, with U.S. stock index futures rising more than 3 percent on Sunday evening, a sign the market could open up on Monday.

New Zealand's dollar was stronger. German stocks rose 5 percent in off-exchange trading with big jumps in bank stocks.

"They're stepping up to the plate with all their fire power. It is literally a financial, economic call to arms," said Peter Kenny, managing director of Knight Equity Markets in Jersey City, New Jersey.