Heading for a Europe-wide government guarantee: how do we ensure legitimacy?
Since my post below, I see Angela Merkel has provided an explicy guarantee of 100% of deposits in German banks and word is the Westminster Parliament will be presented with a similar proposal next week. When governments have to guarantee the deposits of the entire banking system as the price of freeing up lending both between banks and to companies and households, we might as well admit we have a failure of the banking system.
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