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Paris summit seeks European response to crisis
(Agencies)
Updated: 2008-10-04 19:37

PARIS - European leaders meet on Saturday for a summit French President Nicolas Sarkozy hopes will shore up confidence in a banking system hit by the worst financial crisis since the 1930s.

France's President Nicolas Sarkozy delivers a speech at the business and financial outlook for the written press industry at the Elysee Palace in Paris October 2, 2008. [Agencies] 

The meeting follows approval on Friday by the US Congress of a $700-billion bank bailout plan to tackle a crisis sparked by a collapse in the housing market and resulting bad mortgages.

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The fall-out has redrawn the banking landscape on both sides of the Atlantic, paralyzed money markets and caused huge volatility on stock markets.

Sarkozy's main aim is to prove that voters and businesses in Europe can count on governments to rapidly mobilize the resources needed to keep banks running and protect peoples' savings, irrespective of national borders and laws.

Sarkozy has invited German Chancellor Angela Merkel, Italian Prime Minister Silvio Berlusconi and British Prime Minister Gordon Brown. Policymakers to attend include European Central Bank President Jean-Claude Trichet and Jean-Claude Juncker, chairman and chief spokesman for the finance ministers of the euro currency zone.

"The world is on the edge of the abyss because of an irresponsible system," French Prime Minister Francois Fillon said on the eve of the summit.

The head of one of Europe's largest banks said on Saturday that it was essential for governments to play a role in fixing the crisis.

"In Europe, the impact of the subprimes will probably still be felt in the third quarter results," Frederic Oudea, chief executive officer of French bank Societe Generale told le Parisien newspaper.

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