European leaders’ decision to guarantee inter-bank loans up to the end of 2009 is extremely important to get capital moving again, Dutch prime minister Jan Peter Balkenende said on Sunday night.

‘Money has to move between banks again, that makes the economy stronger and offers more financial opportunities,’ Balkenende was reported as saying by the Financieele Dagblad. ‘If there is no credit any more, financial resources will dry up.’
European leaders also agreed that no big financial institution will be allowed to collapse. And they pledged to put money into banks by buying preference shares.
The agreement was greeted positively on the stock markets. By 11am on Monday, Amsterdam’s blue chip AEX index was up 5.7% at 272.77 points.
Financial stocks were the main gainers, with insurer Aegon leading the way.