Vienna  - The Austrian government was set to announce on Monday afternoon plans to recapitalise banks and to raise their liquidity, according to an official statement.

The leading ATX index of the Vienna Stock Exchange soared by 11.88 per cent in the first hours of trading, following the news of the plan which is part of a package agreed to by the 15 eurozone countries on Sunday.

Citing banking sources, Austrian media reported Monday that the government might subscribe for nonvoting shares of major Austrian banks.

But late on Sunday, Austrian Chancellor Alfred Gusenbauer had said that "the holding of shares is only one possibility of recapitalisation," without giving further details.

The Austrian package would include "broad instruments to provide the necessary liquidity for the financial sector" and "preparations for possible recapitalisation measures for affected banks," the government statement said.

The two other elements of the plan would be guarantees for private savings and a ban on short-selling of securities, a practice in which traders seek to profit from falling prices.

So far, none of the Austrian banks have reported liquidity problems, although heavyweights Raiffeisen International Bank-Holding AG and Erste Bank Group AG both saw their shares tumble last week in Vienna.

On Monday, Raiffeisen stocks were up 12.21 per cent, while Erste gained 14.37 per cent.

To ease the global credit crunch and restore confidence in Europe's banking system, leaders of the eurozone countries proposed on Sunday in Paris a rescue package including government guarantees for interbank loans, as well as plans to inject capital to the financial sector and to partially nationalize banks. (dpa)