European leaders rescue lenders

European leaders agreed to guarantee new bank debt and use taxpayer money to keep distressed lenders afloat, helping stem the worst rout in Europe's stock markets in two decades.

At a summit chaired by French President Nicolas Sarkozy, leaders of the 15 countries using the euro hammered out an unprecedented battle plan for bandaging the crippled credit markets and halting panic among investors.

"We need concrete measures, we need unity, which is what we achieved," Sarkozy told a press conference late on Sunday at the Elysee Palace in Paris. "None of our countries acting alone could end this crisis." As they improvised a response to the banking calamity that started on Wall Street, toppling Lehman Brothers Holdings Inc, Europe's leaders sought to go beyond pledges made by the Group of Seven and deflect criticism that they were making scattershot country-by-country efforts without a credible joint strategy.