A roundup of today's other financial news in brief

Spain guarantees bank debt to 2009

Spain passed laws yesterday to guarantee bank debt issued up to the end of next year and said it would buy shares in institutions if the need arose, in measures agreed by European governments to bolster banks.

Prime minister José Luis Rodriguez Zapatero said the government would guarantee debt issued to the end of 2009 with maturities up to a maximum of five years. The limit for the rest of this year is €100 billion, but no figure has been agreed for next year.

"If the financial system reacts as we expect, this won't cost the taxpayer anything," he said.

The government also passed a law allowing it to buy shares to recapitalise banks, but the prime minister said it had no intention of doing so as of now.

So far, Spanish banks have withstood the global financial crisis better than their peers, thanks to regulation which prevented them from dabbling in complex financial instruments popular elsewhere.

They do face problems from the drying up of the wholesale credit market and are exposed to a property slowdown, though they moved much of their real estate risk to other investors via bond issues.

- (Reuters)

€85bn Austrian bank deal 'not a rescue'

Vienna joined its European neighbours yesterday in announcing an €85 billion guarantee for banks and an additional €15 billion equity boost, writes Derek Scally.

Outgoing chancellor Alfred Gusenbauer described the measure as a "protective umbrella" for Austrian banks and ruled out nationalisation of financial institutions. "These measures are necessary because of the international financial crisis, not because of Austrian issues," he said.

Finance minister Wilhelm Molterer said the package of measures was not intended as a "rescue package" and should not be described as such.

Its main aims, he said, were to improve inter-bank lending and ensure that, with similar plans being implemented around Europe, Austrian banks were not at a disadvantage.

A company to be set up under state control will oversee the guarantee. The government has also agreed on an unlimited guarantee on all bank deposits.

EBS withdraws new tracker mortgages

EBS building society has become the latest lender to withdraw tracker mortgages for new customers, following similar moves by AIB and Bank of Ireland last week.

Existing customers with tracker mortgages at the building society are not affected.

Those who already have an offer of a tracker mortgage, but which they have not yet drawn down, can still avail of the mortgage within the terms of their loan agreement.

The building society said that the decision to withdraw tracker products had been made because of the continuing high cost of bank funding in the markets.

Lenders are withdrawing tracker mortgages on new lending as the loans are priced for customers against the European Central Bank rate.

This rate, however, no longer reflects the banks' cost of providing the mortgages because of the global banking crisis.