European Banking Sector:Trouble in store for Europe's banks - by Sarah White

A queue of pensioners waits to board a brown and green bus in the medieval village of Maderuelo on Spain's arid central plains. It only comes once a month and won't take them anywhere, but they're mostly happy with the service.

The bus, parked up alongside a van selling frozen fish, is a mobile bank run by bailed-out Spanish lender Bankia to serve remote areas with no branches. Inside it looks much like any other small branch, but for the elastic bands that keep the furniture in place when it's on the move.

Martin, a 71-year-old villager, would prefer more frequent visits, like the weekly service that used to be provided by the local bank that merged into Bankia.

"It's not normal to have to take cash out for the whole month. What if it gets stolen?" he said.

This is the front-line reality of banking cuts across Europe, where lenders from Italy to France to Bulgaria, brought low by economic turmoil, are slashing costs and services.

Read more: Trouble in store for Europe's banks

Europe rejects U.S. approach to financial crisis, stirring doubts about plan - by Howard Schneider

European officials working to address the region’s financial crisis have rejected key recommendations from the United States and the International Monetary Fund, casting doubt on whether an emerging plan will be as broad or fast-acting as hoped.


As crisis negotiations continued this weekend, European officials said they had reached general agreement on a response they were confident would restore faith in European banks and government finances.

For more: Europe rejects U.S. approach to financial crisis, stirring doubts about plan - The Washington Post

Europe’s debt crisis: Fudge, the final frontier

The brief period of calm brought about by the European Central Bank (ECB) wading into the bond markets from early August to buy Italian and Spanish government debt is over. That intervention at first lowered Italian ten-year bond yields down from over 6% to around 5%. But yields have been creeping up since late August, and jumped above 5.5% on September 5th.

A more fundamental step towards a fiscal union may be needed. One way forward is to introduce Eurobonds, which would pledge “joint and several” liability. In theory that could mean that a small state is on the line for such debt; in practice it would mean Germany. Advocates of Eurobonds point out that the public finances of the euro area, taken as a whole, compare favorably with other big economies such as America and Britain, whose governments are currently able to borrow at record low yields. If the euro area were able to borrow as a whole, it too should benefit from low borrowing costs, helped by the liquidity advantage of creating what could become a vast government-bond market.

For more: Europe’s debt crisis: Fudge, the final frontier | The Economist