Brown to meet EU leaders over crisis

Gordon Brown will join other European leaders this weekend for an emergency summit on the global financial crisis.

However, the Prime Minister's spokesman said an EU-wide bail-out of banks like the one proposed in the US would not be on the agenda.

The US Senate has voted to back a revised $700 billion (£385 billion) bail-out package to rescue America's battered economy.

It still has to be passed by the House of Representatives however, whose rejection of it last week caused share prices to plummet.

Mr Brown's spokesman said: "President Sarkozy confirmed to the Prime Minister that it was not the case that the French were proposing a Europe-wide bail-out."

The discussions were announced as Ireland passed legislation guaranteeing all deposits in Irish banks there which has caused concern in the UK and elsewhere.

The meeting at the Elysee Palace in Paris - announced earlier by French president Nicolas Sarkozy - will see European leaders and the presidents of the EU Commission and European Central Bank hammer out the economic crisis.

It comes ahead of a forthcoming summit of the wealthy G8 nations on the credit crunch.

New banking rules to clamp down on the causes of the financial crisis have been put forward by the EU and include demands that sellers of risky loans be made to hang on to part of the investment and share the risk.

Meanwhile, the Irish move has been criticised by the British Bankers' Association, which claims it puts domestic banks at a disadvantage with customers considering switching to take advantage.

The pledge covers six institutions - Allied Irish Banks, Bank of Ireland, Anglo-Irish Bank, Irish Life and Permanent, Irish Nationwide Building Society and the Educational Building Society including UK branches.

Mr Brown has so far refused to meet calls for a similar blanket ban in the UK, although the sum covered is to be raised from £35,000 to £50,000.

Reorts claim he is to set up an emergency committee to take charge of Britain's response to the financial crisis. The body would formalise the series of regular meetings that have been called since the start of the turmoil on the markets.

© Independent Television News Limited 2008. All rights reserved.