Stocks fell sharply in Asia and Europe this morning as fears over breakdown in the European financial system spread out.
The slowdown came as Germany took what the Financial Times calls a “dramatic move” by saying it would guarantee all funds in German bank accounts – currently worth nearly 570 billion euros – to protect against panic withdrawals. The Economist reports a number of European central banks have started taking similar moves and looks at some of the fallout in European financial markets.
In an editorial, the Guardian comments that the financial storm is now on Europe’s doorstep. As this crisis turns from a financial to an economic one, government intervention will surely become more the rule than the exception.
In the Sydney Morning Herald, columnist Paul Sheehan comments on a book written five years ago by George Soros, warning about the dangers of excessive debt and asks why nothing was done until the financial system was on the brink of collapse.