French banks will pay for the money

French Finance Minister Christine Lagarde (right) and Budget Minister Eric Woerth wait before presenting the 2009 financial law to deputies at the National Assembly in Paris -- October 20, 2008

TEXT OF STORY

Megan Williams: Another day, another rescue. France announced it's making billions of euros available to its major banks. As Megan Williams reports, the French government wants the money to go toward credit for businesses and consumers.


Megan Williams: France's top six banks will each get a proportional slice of a $14 billion pie. In exchange, they have to start lending, lending, lending to people and businesses.

France is in a recession, and its finance minister says growth for next year likely won't even reach 1 percent. Banks have so far kept a tight lid on any cash they have.

But the government money comes with conditions. The banks will eventually have to pay back the cash after they've met other debts. And France will also have to comply to new orders to rein in executive pay.

This week, Germany and Sweden did the same. That puts the number of European countries to cap executive compensation at six.

I'm Megan Williams for Marketplace.

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