Europe Banking Meltdown

TOPWRAP 4-Germany insures savings amid bank rescue talks | Markets | Markets News | Reuters: "The deposit guarantee announced by Germany, Europe's largest economy, could raise the stakes for EU members to match its terms and restart a debate about Europe's fragmented response to the credit crisis.

In the first crack in EU solidarity, Ireland last week promised to guarantee all deposits in its banks, prompting some depositors in Britain to move savings to Irish bank branches. On Saturday, leaders of Europe's four biggest economies -- Germany, France, Britain and Italy -- vowed to restore financial stability but decided against a coordinated, U.S.-style bailout.

Analysts said the broad pledge from European leaders stopped short of the more sweeping action required. 'It's like standing on the rails and watching a train coming at you,' said Daniel Gros, director of the Centre for European Policy Studies in Brussels.

Meanwhile, expectations are building that finance leaders from the Group of Seven richest nations scheduled for this week in Washington could set the stage for coordinated rate cuts as monetary policy makers step into the breach."

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