The European banking crisis will now be in the news.  Their financial system, along with much of the rest of the world financial system, is beginning to disintegrate.  Europe has been blaming the U.S., yet their problems are at least as bad, and are now coming to light.

Please continue to protect yourselves and listen to wise people like Jim Sinclair.

We recommend that you protect yourself by holding your cash that is in banks and brokerage accounts in short term government debt instruments of your respective countries (e.g. in the U.S. that would be U.S. Treasury bills) for the amounts that exceed government insurance limits.

Note the article below:

France, Germany Clash on Financial Rescue
By Huw Jones and Paul Taylor
Wednesday, October 01, 2008 10:49:54 AM
    * Source says France floats idea of EU rescue fund for banks
    * French Finance Minister denies such a plan
    * Germany says totally opposed to such idea
    * EU Commission calls for consistency on deposit guarantees

    BRUSSELS, Oct 1 (Reuters) – France and Germany were at loggerheads on Wednesday over the idea of a U.S.-style financial rescue fund for Europe as EU governments went their separate ways in response to the global credit crisis.
    The European Commission appealed for more consistency in deposit guarantee schemes and stronger pan-European financial supervision, but the apparent discord between Paris and Berlin underlined the difficulty of finding a common approach.
    French Finance Minister Christine Lagarde said in a German newspaper interview that a "European safety net" could be needed to prevent a bank in a smaller EU country from going bankrupt.
    But Chancellor Angela Merkel said Germany "cannot and will not issue a blank cheque for all banks, regardless of whether they behave in a responsible manner or not".
    A European government source said Paris had floated the idea of a 300 billion euro ($425 billion) EU rescue fund ahead of a meeting of leaders of the four big European powers and top EU officials tentatively set for Saturday in Paris.
    But Lagarde told reporters: "There is no such thing. There is nothing of the sort," when asked about the report.
    The German Finance Ministry said: "The government completely disagrees with these plans."
    European Commission President Jose Manuel Barroso said he was working closely with French President Nicolas Sarkozy to present proposals to the leaders in Paris.
    But British Prime Minister Gordon Brown’s office would not confirm he would attend, and France said no firm date had been set for the meeting, which officials said would only go ahead if there was sufficient consensus to achieve a result.
"It’s not just a problem of injecting liquidity," Barroso told a news conference. "We also need to inject credibility in the European response. That’s why we are urging member states for closer cooperation."
    Ireland’s decision to guarantee all deposits in Irish banks infuriated Britain, sucking money away from British banks where the guarantee is more limited, and drew fire from Brussels.
    Asked about the Irish move, EU Competition Commissioner Neelie Kroes said: "I make a plea to national governments today not to act unilaterally but to continue the practice of involving the Commission. It is a must."
    Irish Prime Minister Brian Cowen said after talks with
Sarkozy in Paris that the president backed the Irish pledge, which covers up to 400 billion euros of liabilities — more than twice Ireland’s annual gross domestic product.
    He underlined that the government would charge a commercial price for the insurance.
    France denied an Irish Times report that it would follow suit in giving an unlimited guarantee to depositors.
    A European Commission source said Brussels might have to investigate whether the Irish plan constituted illegal state aid and distorted competition with non-Irish banks, but "these are such exceptional circumstances that it would be politically risky to take action" against Dublin.
    Drawing one lesson from the credit crisis, the Commission proposed legislation on Wednesday to force banks to tie up more capital to cover risky operations, and to limit how much they can lend to one party. [nL1630608] [nL1404124]
    Banks that sell repackaged debt or securitised products such as those that turned toxic in the credit crunch will have to share the risk with buyers. This will be done by the bank retaining a stake of at least 5 percent in the products.
    Internal Market Commissioner Charlie McCreevy also said the EU would follow other parts of the world, such as the United States, if they changed rules on fair-value accounting.
    A requirement that companies regularly restate the value of assets on their balance sheet to reflect changed market prices has been widely blamed for exacerbating the credit crisis.
    Barroso and Luxembourg Prime Minister Jean-Claude Juncker, chairman of euro area finance ministers, appealed to U.S. legislators to pass a $700 billion rescue package for distressed banks seen as key to steadying the global financial system.
    Germany, sceptical of more centralised EU regulation or guarantee funds to which it would be the biggest contributor, said each country should deal with its own problems at home.
    Barroso said the fact that member states, acting together or alone, had rescued several European banks this week showed the existing system of regulation, based largely on national governments and regulators, could cope for now.
    But in the longer term, Barroso said, the EU needed to go further in coordinated action to restore full confidence.
    "We need a further strengthening of the supervision structures at European level," he said.
    The Commission strongly rejected a suggestion by France that EU rules limiting state aid to industry should be eased to facilitate banking rescues.
    "The state aid rules are part of the solution and they are not part of the problem," Kroes told reporters.
    Barroso declined to make specific proposals such as a single European financial regulator, saying he did not want to announce ideas that would not be followed by practical measures.
(Additional reporting by Ingrid Melander in Brussels, Francois Murphy, Anna Willard and Emmanuel Jarry in Paris, Matthias Sobolewski in Berlin, Kevin Smith in Dublin and Adrian Croft in London; Editing by Sharon Lindores and Quentin Bryar.

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