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A draft declaration by euro-zone leaders says their governments plan to temporarily guarantee future loans among private banks to unlock frozen credit markets.
The declaration says the governments would guarantee "for an interim period and on appropriate commercial terms" new interbank loans between private institutions for the next five years.
The statement obtained by The Associated Press says "this scheme would be limited in amount, temporary and will be applied under close scrutiny of financial authorities until Dec. 31, 2009."
"I don't even want to imagine what might happen'' if the markets react negatively, Klaus-Peter Mueller, head of the German banking association, said earlier today in Washington before the blueprint was unveiled. The market response may be something "we haven't seen at any stage in our lifetimes."