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Japan, US Offer Credit Help to Overcome Economic Crisis


Japan says it is prepared to inject public funds into debt-laden banks, while the U.S. central bank says it will start buying commercial paper to help struggling companies.

Japan's Finance Minister Kaoru Yosano said Tuesday, that big banks should get the same help as regional banks.

In Washington, the Federal Reserve invoked emergency authority to create a facility to buy commercial paper from money market mutual funds. Many companies rely on the written promises to repay loans known as commercial paper to pay workers and buy supplies.

In the French city of Strasbourg, French President Nicolas Sarkozy called for economic giants India and China to join a world summit to restructure the global financial system.

Mr. Sarkozy told European lawmakers he would push the idea during the Asia-Europe Meeting in Beijing this week.

Japan's Foreign Ministry says Prime Minister Taro Aso and U.S. President George Bush have agreed to work together to make the summit a success.

A ministry statement Tuesday says the men spoke by telephone and agreed the summit should be held as soon as possible after the November 4 U.S. presidential election.

French President Sarkozy outlined some ideas for reshaping the financial sector. He suggests no financial institutions should be allowed to work without financial regulations. Under his plan, no bank receiving state money would be allowed to work with tax havens.

Mr. Sarkozy also proposed European nations should set up sovereign wealth funds to prevent European companies from being purchased by foreign entities.

The International Monetary Fund warned in a report that more European banks may fail, but that recent international rescue packages likely have prevented a worse outcome.

Key European indexes opened higher Tuesday, led by the CAC in Paris, which was up more than two percent.

Asian markets were mixed. Main stock indexes in Tokyo and Sydney were up more than three percent, but down in Hong Kong and Seoul.

Some information for this report was provided by AFP, AP, Bloomberg and Reuters.

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