Nicolas Sarkozy, the French president, pledged €320bn ($435bn, £250bn) in guarantees for new bank debt on Monday and a €40bn fund for recapitalising lenders as he unveiled his country’s contribution to a eurozone-wide bail-out programme.

The government wants to use its €40bn bail-out fund to lift the tier one capital ratio of French banks – the key measure of balance sheet strength – to 9 per cent so they are on a par with freshly recapitalised British banks.