FRANKFURT, Dec 7 (Reuters) - Details of government-led bank rescue plans need fleshing out and central bank measures to reignite interbank lending are creating their own problems, the Bank for International Settlements said.
The Swiss-based BIS said in its quarterly review, published on Sunday, that it was not clear whether government rescue packages would be enough to shore up the global economy.
In a section on rescue measures, it said country-to-country differences in the plans and a lack of details were creating confusion.
"Programmes are being modified as the crisis evolves, and details still need to be spelled out in many cases," said the BIS, which acts as a forum for the world's central banks.
"As a consequence, the impact of government measures on competition and incentives in the financial industry remains uncertain, and whether these measures are sufficient to restart financial intermediation in the broader economy is yet to be seen."
It also raised questions over state plans to buy up banks' toxic assets, warning that governments may have to be willing to buy up anything and everything.
"The range of eligible assets might have to cover all distressed credit instruments to have a strong and immediate impact on market confidence. This would require large programmes," the BIS said, adding that one issue was determining the price at which governments purchase distressed assets.
The financial crisis has effectively closed down money markets, forcing central banks to pump in billions in a range of currencies to try to support banks.
The BIS said that while the moves had kept the system intact, they may also be preventing markets returning to normal.
There was also evidence that government interventions were distorting financial markets.
"Differences in the scope and price of government guarantee schemes for new debt issuance may put banks in different jurisdictions at a disadvantage in wholesale funding markets," it said.
The BIS urged governments to come up with a "clear exit strategy" from interventions and said more clarity was needed on protection for savers with money in accounts at foreign-owned banks.
Elsewhere in the report, the BIS said an analysis of commodity price rises and their impact on inflation from 2003 showed that core inflation -- which excludes food and energy prices -- had not tended to drift up to match rising headline inflation rates.
It said this suggested there were no strong second-round inflation effects such as over-the-top price hikes by firms.
For the full report, please see the BIS Web site: www.bis.org (Reporting by Marc Jones; editing by Stephen Nisbet)