Ultra-fast approval eyed for German bank plan-report

 

BERLIN, Oct 11 (Reuters) - Germany's multi-billion dollar rescue package for its financial sector is due to be adopted "in the next few days" with the aid of accelerated legal proceedings, weekly magazine Der Spiegel reported on Saturday.

A fast-tracked law should be approved by the upper and lower houses of parliament and President Horst Koehler to enable the measures to take effect as soon as possible, the report said.

In its response to the global financial crisis, Germany is considering a British-style package that would offer the finance industry interbank guarantees worth "triple digit" billions or direct loans, daily Die Welt reported on Friday.

Chancellor Angela Merkel's government is also mulling the injection of equity capital in "double digit" billions, it said.

In exchange for the money, the government would take stakes in banks, the paper said. A coalition party source later confirmed the essence of the report to Reuters.

Afterwards, Finance Minister Peer Steinbrueck admitted that the government was working on a comprehensive plan, but did not elaborate on it, noting only that there would be "very rigid requirements placed upon those we would be helping".

Steinbrueck said that by Monday at the latest a signal would need to be sent "to calm things down, a signal to win back credibility and confidence in Germany".

Die Welt noted that some members of Merkel's Christian Democrats were strongly opposed to the proposals.

The British government has set aside at least 50 billion pounds to help banks to boost their capital, but said there is no obligation on banks to use the government funds.

Britain's plan also guarantees interbank lending by some 250 billion pounds to help unfreeze markets and extends a Bank of England scheme that swaps banks' risky assets for government debt to provide 200 billion pounds of cash to the system.

BRETTON WOODS

Separately, Koehler, a former head of the International Monetary Fund (IMF), called for the staging of an international conference along the lines of the one held in Bretton Woods in 1944 that helped draw up the post-war financial order.

"I'd like to see a Bretton Woods II," he told Der Spiegel when discussing what should be done to tackle the financial crisis. "I think the crisis is manageable. It's in our hands."

Germany's Foreign Minister Frank-Walter Steinmeier told the magazine he wanted to see a body comprising an expanded Group of Eight industrial nations to discuss a new financial order.

"Alongside the G8, it should include rising economic powers like Brazil, India, China with the same rights and duties, and perhaps the odd country from the Gulf region," he said.

Steinmeier added that a new global financial regulator should be created within the framework of the IMF. (Writing by Dave Graham, editing by Mike Peacock)