EU moves to restore confidence in banking system

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LUXEMBOURG, Oct 7 (AFP): European finance ministers were set today to begin preparing their first joint measure to reassure savers unnerved by the financial crisis by ramping up minimum bank deposit guarantees.
As panic swept through the European financial sector Monday with stock markets plunging amid growing concerns about the health of the banking system following a series of recent state bailouts, EU countries signalled they plan to protect savers.
In joint declaration they pledged to protect the stability of financial institutions by providing "liquidity support through central banks, action to deal with individual banks or enhanced depositor protection schemes.
In Luxembourg, finance ministers of the 15 countries that share the euro met Monday evening, and ministers from all 27 EU members were set to meet Tuesday to begin working to put that pledge into action.
"We will all take the necessary measures to ensure the stability of the financial system," said Jean-Claude Juncker, who heads the group of finance ministers from the 15 countries that share the euro. "We have agreed (to assure) that no financial institution of systemic importance should be allowed to fail," he told journalists after chairing a meeting in Luxembourg, where he is both premier and finance minister.
A coordinated European response to the crisis has been slow in coming despite the leaders of Britain, France, German and Italy meeting over the weekend, with Berlin opposing a proposal to create a European-wide bank rescue fund along the lines of the 700-billion-dollar (520-billion-euro) US bailout package.