NightBlogger

Germany joined Ireland and Greece on Sunday in guaranteeing all private savings accounts, putting Europe’s biggest economy at odds with calls for a unified European response to the global financial meltdown. The decision came as governments across Europe scrambled to save failing banks, working largely on their own a day after leaders of the continent’s four biggest economies called for tighter regulation and a coordinated response. Their failure to agree an EU-wide plan showcased the divisions in Europe on how to deal with the crisis. France had suggested a multibillion-dollar EU-wide government bailout plan, but backed off after Germany said banks must find their own way out. More

Video: To understand just how gloomy the state of the US economy is, watch this Video of The assistant Treasury Secretary, Phillip Swagel, on the US economy. Try as he might, he cannot hide his fear and gloom.

LATimes
U.S. Treasury Secretary Henry M. Paulson Jr. on Wednesday called for regulatory changes that would allow financial firms to fail without threatening broader market stability. The Treasury chief also proposed steps providing for the president to approve of any use of taxpayer funds to aid a financial company. In a speech in London on Wednesday, Paulson identified a legal gap that leaves unspecified how to deal with failures of companies that don’t take deposits, such as investment banks. Paulson’s proposals aim to tighten supervisors’ oversight of lenders and dealers while at the same time discourage companies from depending on a government rescue if their bets go wrong. His speech comes a week before a congressional hearing to debate a regulatory overhaul in the wake of the credit crisis that caused the near-bankruptcy of Bear Stearns Cos. More