We’re going to get the exact dollar totals Monday, but the Eurozone plan to backstop banks appears to be substantial. The German share alone is going to be 400 billion euros ($542 billion), it was reported Sunday.
The UK is also about to pour 39 billion pounds ($66 billion) into RBS, HBOS and Lloyds TSB. And we’re still waiting to hear what exactly the U.S. Treasury has in mind–but that it will involve spending hundreds of billions of dollars and possibly guaranteeing more seems clear.
It’s the kind of response that, if it had come a month ago, would have nipped all this end-of-the-financial-world talk in the bud. Of course, it couldn’t have happened a month ago, because nobody was scared enough.
Is it enough now? Depends what you mean by enough. Enough to keep the cash coming out of your local ATM this week? You betcha. Enough to avert a global recession? No way. Enough to someday be seen as the beginning of the end of the Panic of 2008? My sense at the moment is yes. But it’s not the kind of thing I’d want to put a lot of money on.