Another is to encourage contingent arrangements with foreign banks that guarantee limited credit lines in advance.
In addition to injecting money into banks, the government will guarantee new debt issued by banks for three years, and will offer an unlimited guarantee on non-interest-bearing deposits such as those used by businesses to make payroll.
We want to help banks with a guarantee so that the provision of liquidity gets moving, and we want to recapitalise banks.
He quotes bankers who say that such a guarantee might encourage more banks to lend to growth companies based on the value of their intangible assets, because the guarantee would remove much of the risk for banks.
Faced with a near collapse they are far more likely to give banks' creditors a guarantee than to hurt them.
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Even with the backing of an SBA guarantee, banks do not want to fund any loan that has unwarranted risk.
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"For many decades, banks enjoyed an implicit government guarantee, " said Harald Benink, professor of banking and finance at Tilburg University.
Ideally investment banks would have no public guarantee, their profits would reflect private endeavour alone, and their pay would be decided by their owners.
The G7 had earlier not ruled out adopting another part of the British plan - to guarantee borrowing between banks - as they issued their plan in Washington.
He said that the Bank of England's scheme should persuade both banks and FSA to lighten up: the mere existence of the Bank's new guarantee that easy money is available to banks should lead to an opening of the lending valve.
But secondly, do you think Citibank or Wells or any of those banks are going to provide the guarantee?
The proposal would include a single deposit guarantee organization covering all banks in the union, something similar to the FDIC, which covers U.S. bank deposits.
These European governments are telling the banks with extra cash, that if they are willing to loan to the poor banks again, the governments will guarantee those loans.
But just as important, Renee, maybe more important, the governments are telling these banks with extra cash that if they go ahead and start lending to the poor banks again, the government will guarantee those loans.
Although the country's government claims to be fully funded until the middle of next year, it has provided a blanket guarantee to the Irish banks, some of whom are now finding it impossible to borrow money in the markets.
This is fine in theory, but in practice it often distorts the market for the remaining privately owned banks by keeping too many banks in business and by allowing nationalised banks with the benefit of a government guarantee to borrow more cheaply.
The lending was often careless (the government guarantee of virtually all deposits gave banks more incentive to be reckless).
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In return for a state guarantee for all deposits, the banks have had to accept a new regulatory agency with sweeping powers.
Yet the ECB only wants the job if it gets new powers, and access to funds, to restructure and wind down ailing banks, all backed by a credible system to guarantee bank deposits.
However as the financial crisis gathered pace in 2008, the practical policy of a 100% government guarantee was extended to savers in other banks that became insolvent or were in danger of becoming so.
Ireland has made a valiant attempt to rein in its deficit, but it is still in deep financial trouble because in 2008 Dublin offered a blanket guarantee for the liabilities of its local banks (covering creditors and depositors), in a step which has now proven deeply unaffordable.
It includes 400bn euros to guarantee interbank lending and 80bn euros to recapitalise banks, in return for equity stakes.
They would also like to see a joint bank deposit guarantee scheme and a fund for winding down banks.
The Icelandic government seized one of its biggest banks, Landsbanki, on Tuesday, after agreeing to guarantee all banking deposits in the country.
Under the administration's plan, the government temporarily will increase the loan guarantee to 90 percent as an incentive to banks to lend.
The banks will not get this country in trouble, I guarantee it.
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It sounds like Obama will ask Congress to let the Federal Housing Administration (FHA) guarantee refinancings by underwater borrowers and charge big banks a fee to cover the costs.
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At the same time, we were able to increase the government guarantee on SBA loans, to encourage more banks and credit unions to go ahead and make SBA loans to good, creditworthy small businesses.
The Irish government says it will guarantee all deposits in the country's main banks for two years .
Ultimately, if the public thinks multiple failures of big banks are likely, only the government can offer a credible guarantee.
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