Deutsche Bank AG and Credit Suisse Group climbed more than 15 percent, while Macquarie Group Ltd., Australia's largest investment bank, soared 38 percent after U.S. Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben S. Bernanke proposed removing troubled assets from the balance sheets of financial companies. Barclays Plc surged 32 percent as the U.K.'s Financial Services Authority banned speculators from betting against financial shares until Jan. 16.
Europe's Dow Jones Stoxx 600 Index rose the most since data for the index began in 1987, adding 6.4 percent to 273.31 at 11:49 a.m. in London, while the U.K.'s FTSE 100 Index posted a record advance of 8.3 percent. Russia's RTS Index jumped 20 percent after a two-day suspension and President Dmitry Medvedev's pledge of $20 billion to prop up the market. Futures on the Standard & Poor's 500 Index climbed 3.7 percent, and the MSCI Asia Pacific Index rebounded 4.8 percent from a three-year low. China's CSI 300 Index increased 9.3 percent, the most since the measure was created in 2005.
The MSCI World Index is still down 3.1 percent this week after Lehman Brothers Holdings Inc. filed for bankruptcy, the U.S. government seized control of American International Group Inc. and Merrill Lynch & Co. was forced to sell itself to Bank of America Corp. More than $500 billion in credit losses and writedowns at banks have pushed the global economy toward a recession.
Deutsche Bank, Germany's largest bank, jumped 15 percent to 57.91 euros, while Credit Suisse, Switzerland's second- largest bank, climbed 16 percent to 54.9 francs. UBS AG, the European bank hardest hit by the subprime crisis, added 31 percent to 20.84 francs.
HBOS Plc gained 39 percent to 240 pence, trimming its weekly decline to 15 percent. Barclays rose 32 percent to 396.5 pence, leaving it with a 13 percent gain for the week. Lloyd's TSB Group Plc, the U.K.'s biggest provider of checking accounts, advanced 35 percent to 321 pence.
Bank of China, the nation's second-biggest bank, jumped 10 percent to 3.36 yuan. A 24 percent slump in the month through yesterday left it valued at a record low of 10.5 times profit.
China's government said it will buy shares in three of the largest state-owned banks and scrapped the tax on share purchases.
Morgan Stanley, the second-biggest U.S. securities firm, added 14 percent to $25.75 in New York as the U.S. Securities and Exchange Commission temporarily banned short-selling in shares of 799 financial companies to curtail the market rout.