Nicolas Sarkozy, President of France

Global Financial Crisis: A summit meeting of the leaders of the 15 member countries of the Eurozone on Sunday at the Élysée Palace in Paris, which was also attended by the Presidents of the European Commission and the European Central Bank, has agreed that no major financial institution will be allowed to collapse and loans between banks in the inter-bank market will be State guaranteed on a temporary basis, in order to address the liquidity crisis. Germany, France and Italy and other countries plan to coordinate announcements on Monday, on recapitalisation of their principal banks.

``We need concrete measures, we need unity, which is what we achieved today,''  President Nicolas Sarkozy told a press conference at the Élysée Palace in Paris. ``None of our countries acting alone could end this crisis stop.''

The key measures agreed on Sunday are: a pledge to guarantee new bank debt issuance until the end of 2009; permission for governments to shore up banks by buying preferred shares; and a commitment to recapitalise any ``systemically'' critical banks in distress.

The European Central Bank will create an unsecured lending facility to buy commercial paper from banks, similar to the move by the US Federal Reserve last week, providing, in effect, guaranteed funding for banks.

Alistair Darling, the British chancellor said on Sunday that all governments needed “to act now … The threat is blindingly obvious. You can’t stabilise economies unless you have a stable banking system”.

The German finance ministry said it would outline its detailed plans on Monday. A spokesman for the Finance ministry said: ”The aim is for an orderly but quick legislative process aimed at averting risks for our economy”.

No cost estimates were given on how much governments are willing to spend or the size of bank assets deemed at risk.

``The most precious asset of all is confidence, and it's something that has been lost in recent weeks,'' UK Prime Minister Gordon Brown said after an earlier meeting at the Elysée Palace. Now it ``is something that we will restore through coordinated intervention '' Brown said.

The UK government todayis expected to underwrite share sales of as much as €35 billion in four of the UK's biggest banks - -  Royal Bank of Scotland, Barclay's, HBOS and Lloyds TSB - - the Sunday Times reported saidon Sunday.

The UK government is also expected to appoint its own representatives to the boards of the banks, a government official said yesterday. Brown said today that this was``a matter for individual negotiations with banks.''

Brown wanted ``to persuade European countries to adopt the comprehensive approach we have taken in Britain,'' he wrote in the Sunday Mirror today. ``For Europe, the stakes could not be higher and this is the moment of truth.''

US Treasury Secretary Hank Paulson, said at a meeting of finance ministers at the annual meeting of the International Monetary Fund (IMF) in Washington DC on Saturday:"This is a very challenging period for the United States, as well as the global economy.  In recent weeks, financial market turmoil intensified throughout the world and credit markets froze, causing a chain reaction resulting in non-financial companies experiencing difficulty in financing normal business operations.   These extraordinary events require a global response and financial officials from around the world are working together, taking action individually and collectively as necessary, to address these challenges.  Our current actions focus on five areas: liquidity, capital, protecting investors, macroeconomic response and the regulatory environment. 

• First, the Federal Reserve, along with other central banks, has acted to provide additional liquidity.  Supplementing these actions, Treasury has implemented a temporary guaranty program for U.S. money market mutual funds. 

• Second, financial authorities are acting swiftly to strengthen our financial institutions.  Recently-approved legislation has created a $700 billion program in the United States to  purchase or insure mortgage assets, and to purchase equity in financial institutions as  Treasury and Federal Reserve deem necessary to promote financial market stability.   

• Third, to protect investors, the SEC and its counterparts around the world have taken action to address market abuse.  Separately, the United States and members of the European Union have increased deposit insurance coverage. 

• Fourth, to facilitate tackling the turmoil and the economic slowdown, macroeconomic policy toolkits can and should be used as appropriate according to each country's individual circumstances. 

• Finally, we have worked with market participants and regulators globally to address the current challenges and to restore stability and confidence to financial markets around the world.  The President's Working Group on Financial Markets (PWG) in the United States, for example, has coordinated with the Financial Stability Forum on developing and implementing key policy recommendations that are designed to strengthen market transparency and disclosure, risk awareness and risk management, capital and regulatory policies, processes for and practices regarding the use of credit ratings, and market infrastructure for over-the-counter derivatives products."

Bloomberg reports that the Royal Bank of Scotland Group Plc Chief Executive Officer Sir Fred Goodwin plans to step down as the bank raises at least 10 billion pounds ($17 billion) in a government rescue, two people familiar with the matter said.