US summons banks to meeting on rescue plan

WASHINGTON, october 13 : Major stock markets around the world rose for the first time in days Monday as the US said it plans to swiftly implement a broad financial rescue package and Europe put almost $2 trillion on the line to break the lending logjam threatening the world's economy.

The Bush administration summoned executives from leading banks to a meeting in Washington Monday afternoon to work out details of the $700 billion plan aimed at thawing the credit markets — the economy’s lifeblood.

Stock markets around the world rose. The Dow Jones industrials gained more than 500 points in a rebound from days of staggering losses. European markets rallied following Asia’s lead in response to the widespread Government initiatives.

“These are tough times for our economies yet we can be confident that we can work our way through these challenges and America will continue to work closely with the other nations to coordinate our response to this global financial crisis,” President Bush said following a meeting with Italian Premier Silvio Berlusconi.

Treasury Department spokeswoman Brookly McLaughlin said officials from the Treasury Department and the Federal Reserve would participate in the meeting at the Treasury Department. The discussions are aimed at finalising details on the rescue package Congress passed on October 3.

The package has quickly expanded from purchasing financial firms’ bad debt to include the government taking partial ownership in banks, among other possible steps.

Over the weekend, Paulson called the heads of the five biggest US banks to come to Washington for face-to-face talks about the rescue plan, according to people briefed on the matter. They were not authorised to speak publicly because of the sensitivity of the negotiations.

Goldman Sachs CEO Lloyd Blankfein, Morgan Stanley CEO John Mack, Citigroup CEO Vikram Pandit, JPMorgan Chase & Co CEO Jamie Dimon, and Bank of America Corp. CEO Kenneth Lewis were all asked to attend. There was some speculation that Paulson might have expanded the invitation to at least three other CEOs from various regional banks, the people said.

It was expected that whatever comes out of the meeting will be used to put the finishing touches on the plan, the people said.

The discussions take place against the backdrop of a presidential election, with about three weeks left before Americans go to the polls.

The administration’s interim bailout package chief, Neel Kashkari, said early Monday the government is moving quickly to implement the rescue program, including consulting with private law firms on...

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