Word: banking
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...Expect a Divine Bank Deposit Rabbi Nevins cautions, "When I ask God for help, I'm not asking for an extra miracle, for a great hand to drop a wad of cash on my mortgage." Such supernatural interventions may occur, he says, "but I just don't know how to prove that." Says Ali: "God accepts our prayers, but God acts based on his wisdom." Says Martin: "If you imagine that God is like a cosmic gum-ball machine, you have to start rethinking your image of God. The help may not come as quickly or in the exact...
...vowed to deliver financial relief to any developing country facing an emergency. The World Bank says it has roughly $27 billion ready to offer in loans through the International Bank for Development and Reconstruction. But with a global recession looming, no coordinated plan addressing the needs of poor nations is being discussed. "People are starting to worry a little bit that some of these emerging market countries are the ones that are left out," says Ben Carliner, director of research at the Economic Strategy Institute, a think tank in Washington...
...that kind of state involvement is a central part of the European bailout plans, which involve governments recapitalizing banks in trouble in exchange for a slice of equity. In plain English, that's called partial renationalization. How much equity depends on the size of the bailout, and for the moment, other than in Britain, precise details about which banks will receive how much and in exchange for what remain to be negotiated. Along with the fresh capital, governments are proposing a series of other measures designed to restore confidence in the banking system by guaranteeing deposits, jump-starting interbank lending...
...cause political ructions. But not all of it. France's Finance Minister Christine Lagarde told French radio shortly before last weekends G7 summit: "As soon as you let one domino fall, the rest risk crashing down." She didn't exonerate Lehman - "there were certainly bad decisions taken by that bank, bad management," she said. But under the present panicky conditions, no bank should be allowed to go under. That's the motto the Europeans have adopted as part of their plan...
Will the European plans work? There is one hopeful precedent, in Sweden, which in the early 1990s solved its own banking crisis by guaranteeing deposits, injecting huge amounts of liquidity into the banking system via the central bank, and forcing banks to write down the value of their assets very quickly. In describing why that bailout worked, Urban Baeckstroem, the former Swedish central bank president who played a central role in the rescue, has identified some other vital measures. The first is that the Swedish government quickly moved to clean up government finances at the same time as it bailed...