Europeans seek unity in bank bailouts

DAVOS, Switzerland — The European Central Bank is working on guidelines to prevent bailout plans from one country from being significantly more generous than plans from another, a central-bank official said Saturday, speaking on the condition of anonymity because the guidelines have not been completed.

The new guidelines are an attempt to prevent countries from carrying out rescue plans that favor their banks over others, a tactic the British prime minister, Gordon Brown, called "financial protectionism" at the World Economic Forum here Saturday.

European officials are considering more capital injections into banks in addition to buying bad assets from banks and issuing guarantees of their value. Buying or guaranteeing these assets would remove worries that the banks would be hurt further if the assets continued to lose value. But it would also raise issues of fairness if the prices paid for the assets appeared to be too high.

The difficulty of determining the value of such assets was one reason the Bush administration changed course after Congress passed the Troubled Asset Relief Programs, which had the government buying distressed assets from banks. Instead, the government began investing directly in financial institutions.

There is also concern overseas about whether the United States, which is considering several options for a new round of bailouts, will have an advantage with its plan because of its greater access to capital markets or will push banks to restrict foreign lending in favor of lending to American companies and consumers.