Eurogroup: Lagarde envisages a "debate" on the guarantee of interbank transactions

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The French Minister of Economy Christine Lagarde found Saturday in Washington that there would "undoubtedly a debate" on the Eurogroup meeting on Sunday the possibility of implementing a guarantee of interbank transactions throughout the euro area .

Asked at a press conference on the intention attributed to the German government to implement a loan guarantee that banks are among them, Ms. Lagarde said that "it is a different modalities of implementation principles "contained in the communiqué issued Friday at the end of the meeting of G7 Finance.

"There will surely debate" at the meeting of the Eurogroup in Paris, she added.

She said that it is nevertheless a "very heavy technical measure" to implement that France has "applied alongside Belgium and Luxembourg in regard to certain bond issues of the Dexia group."

"Likewise, the British stipulated in their (rescue bank) in respect of a number of institutions, with certain criteria," she continued.

"This is not a sort of general warranty and unrestricted interbank loans, so clearly there will be a debate on the issue," noted Ms. Lagarde.

According to several German newspapers, Berlin could secure loans from bank to bank amounting to hundreds of billions of euros and bail out banks in exchange for stakes in their capital, a plan like the one announced by London on Wednesday.

The experts estimate the cost between 300 and 400 billion euros, according to government sources quoted by Handelsblatt.

When asked whether such a measure applied in a euro-zone countries, would not oblige other countries in the area to do so at the risk of creating distortions of competition between banks from one country to the another, Ms. Lagarde said that it is "a matter far too technical" to "give an agreement in principle".

"The security, as it is in respect of certain claims of certain emissions (bond), interbank loans, deposits by depositors, it is multiple dimension, and must be considered case by case if it presents or not a "distortion of competition, she said.

The minister however reiterated that the G7 Finance is committed in its statement Friday, as European ministers a few days earlier, to ensure that measures taken in one member state do not produce effects Distortion its partners.( Finance Information City )