BRUSSELS — European leaders, pressured by sliding markets and doubts over their ability to act in unison, agreed on Sunday to provide a huge rescue package of nearly $1 trillion in a sweeping effort to regain lost credibility with investors.
After more than 10 hours of talks, finance ministers from the European Union agreed on a deal that would provide $560 billion in new loans and $76 billion under an existing lending program. Elena Salgado, the Spanish finance minister, who announced the deal, also said the International Monetary Fund was prepared to give up to $321 billion separately.
Officials are hoping the size of the program — a total of $957 billion — will signal a "shock and awe" commitment that will be viewed in the same vein as the $700 billion package the United States government provided to help its own ailing financial institutions in 2008.
Also Sunday, the U.S. Federal Reserve opened a program to ship U.S. dollars to Europe to head off a broader financial crisis on the continent.
Other central banks, including the Bank of Canada, the Bank of England, the European Central Bank, the Swiss National Bank and the Bank of Japan also are involved in the dollar swap effort.
The plan is to ship dollars are overseas through the foreign central banks. In turn, these central banks can lend the dollars to banks in their home countries are in need of dollar funding to prevent the European crisis from spreading further.
Early reaction from world markets was positive, with Japan's Nikkei index rising more than 1 percentage point after being battered last week.
In reaching the deal, European leaders were making yet another attempt to stem a debt crisis that has engulfed Europe and global markets. Underscoring the urgency, President Barack Obama spoke to the German chancellor, Angela Merkel, and the French president, Nicolas Sarkozy, on Sunday about the need for decisive action to restore investor confidence.
New political complications in two of Europe's most important countries added to the challenge. In Germany, voter anger at the effort to save Greece cost Merkel an important regional election Sunday, undermining her leadership , and in Britain, the government remained in a state of suspended animation because of the inconclusive Parliamentary elections last week.
The package comes at a time of mounting financial unease. Riots in Greece, ever-tightening terms of credit and the unexplained free fall in the American stock market last Thursday have compounded the sense that the European Union's inability to address its sovereign debt crisis might lead to the type of systemic collapse that followed the fall of Lehman Brothers.
While the sums being discussed are eye-catching, some bankers questioned whether they would be enough to calm the markets. One banker said that with more and more European economies coping with rising deficits raising, guaranteeing or backing such a large number would not be an easy task — unless the European Central Bank stepped in a more forceful and specific manner. The bank has so far rebuffed calls to inject liquidity into the markets by buying back European bonds.
Sunday's meetings represented an extraordinary convergence of diplomatic activity, crammed into a tight time frame. Political leaders, including Sarkozy, said early Saturday morning, at the end of an earlier summit meeting, that a loan mechanism intended to restore confidence should be ready by this morning. That effectively left the European Commission and finance ministers a single weekend to change the way the European Union operates its finances.
Merkel attended a victory parade on Red Square in Moscow on Sunday, a sign of how seriously Germans consider reconciliation with Russia. Sarkozy and the Italian prime minister, Silvio Berlusconi, opted not to attend, regarding the financial crisis as more urgent.
As a larger European rescue was being debated, the International Monetary Fund's executive board took the expected step of approving the fund's $38 billion loan to Greece. And as officials said that the loan would take care of Greece's financing needs through 2012 they acknowledged that market turmoil had persisted in spite of the Greece plan.
"It's clear from the developments of the past few days that there is broader stress in the financial markets beyond Greece," said John P. Lipsky, the fund's first deputy managing director.
In response to questions about aiding other troubled economies in Europe, Lipsky emphasized, "There are no program negotiations at this time with either Portugal or Spain."
In Britain Sunday, the two parties that could form Britain's next government held hours of closed-door talks without reaching a power-sharing deal, raising fears that the political uncertainty could stoke market jitters when trading reopens today.
Conservatives and Liberal Democrats have a "mountain to climb" on issues including electoral reform, a senior member of the Liberal Democrats said. The Liberal Democrats want Britain to shed a system that gave them just 9 percent of the seats in Parliament after they won 23 percent of the popular vote, but if Conservatives give in it could leave them at the smaller party's mercy in future elections.
The divide could offer an opening for Prime Minister Gordon Brown's Labor Party to stay in power through a coalition with the Liberal Democrats and some smaller parties. Liberal Democrat leader Nick Clegg wasn't involved in talks with Conservatives on Sunday, but he met with Brown that afternoon and had what a party spokesman said was an "amicable discussion."
A deal must be brokered soon to calm financial market anxieties about Britain's economic stability.
More talks were planned today.
Information from the New York Times and the Associated Press was used in this report.