Europe Is Slow to Face Up to the Financial Crisis

A common market but not a common regulatory system.

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But since then, Germany, Austria, Greece, Sweden, Denmark, and Iceland have made similar pledges to depositors. On Tuesday, EU finance ministers meeting in an emergency session in Luxembourg agreed that banks throughout the European Union should guarantee customer deposits up to $68,250, an increase of $34,500.

That's the kind of go-slow reaction some economists say only proves how far behind events policymakers are and further unsettles stressed-out markets.

Ultimately, many economists believe that all European countries—either in lock step or individually—will soon offer 100 percent guarantees. That would be a good thing, Dale argues, though he warns that guarantees may have to cover wholesale, as well as retail, deposits to truly ease the credit logjam.

Many banks will end up "semi-nationalized," he admits, "but that's happening anyway through the back door."

The notion, Walker says, is that putting enough guarantees in place "stops the panic," and interbank lending will resume, followed by renewed lending to businesses and consumers.

But, Dale warns, for it to work, policymakers have to stop dithering. "They need to stop talking about it. They need to just do it."