Dollar slides against euro as German business confidence rises (AFP)
AFP - The dollar fell against the euro, primarily as the European currency benefitted from robust German business confidence figures, traders said.
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IMF chief welcomes European bank rescue plan (AP)
2008.10.1340 minutes ago
PARIS - The head of the International Monetary Fund welcomed a European bank rescue plan on Monday despite its high cost, and predicted that weekend efforts by world leaders would soothe anxious global markets.
"I don't think there's a reason ... to fear," Dominique Strauss-Kahn said on Europe-1 radio. "The political determination is total."
In Europe's most unified response so far to the financial crisis, nations that use the euro currency agreed Sunday to temporarily guarantee bank refinancing and pledged to prevent banks from failing, as part of a raft of emergency measures designed to ease the credit crunch.
Banks' reluctance to lend to each other has helped fuel the crisis that has pulled down some of Wall Street's most storied names and is pushing the U.S. and Europe to the brink of recession.
"We must recapitalize the banks ... otherwise everyone will suffer," Strauss-Kahn said. "And that costs money."
European leaders didn't put an overall price tag on the rescue plan, leaving it up to individual governments to determine how much it will cost.
Strauss-Kahn said measures taken over the past few days will "assure" markets that have been acting "in an irrational way."
He also suggested the ball was now in Washington's camp to respond to the European measures with similar plans to boost interbank lending.
"Europe has a leadership role to play," he said.
Finance ministers from the Group of 20, which includes rich countries and major developing nations such as China, Brazil and India, meeting in Washington this weekend, pledged to intensify their efforts to unblock a frozen financial system before it does more damage to an increasingly shaky global economy — but made no concrete offers of new moves.
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