The measures were due to be discussed by Chancellor Angela Merkel's cabinet in a meeting starting at 1pm (7pm Singapore time) before being voted on by MPs with a view to the package becoming law this week.

The proposals, hammered out in consultation with the German central bank, the financial regulator and representatives from the banks, are aimed at 'stabilising the financial market, ensuring the supply of capital to the German economy and providing security for savers and investors,' it said.

'Such unusual market conditions call for unusual measures,' it said. 'It is not just about protecting banks and other financial institutions but also about protecting citizens.' 'The government is convinced that dealing with the current dangers takes priority, so that trust in our financial system can be assured,' it added.

The measures also include changing certain accounting procedures that have been blamed for exacerbating the financial crisis in time for firms to apply them for their accounts for the third quarter, which ended on September 30. -- AFP