It has been yet another long and frantic week, starting with a flurry of news from the UK and Europe on bank nationalisations, rights issues, and  rescues, continuing on with the Irish Budget, and finishing off with yet more market volatility.

As you may have heard, the US government announced overnight that it too is going to inject capital into its banks, by offering to buy preference shares.

This blog entry is going to be bank free, with no mention of credit crunches, liquidity injections, nationalisations, or  interbank lending.  We've had enough of that over the last few weeks, and instead today I'm going to focus on the Budget.  (But check back later this morning for an update on thebanking news, where we did see significant overnight developments in the US).

Well we NEARLY got through the weekend without more dramatic news and bank rescues. But not in the end. The emails started to arrive late on Sunday afternoon, and from then on the news flooded in fast and furious.

I'm getting tired of saying things like, “Today was another extraordinary day....” The only extraordinary day you can have these days is if we do NOT have an historic event during the day!
All that said, today WAS another historic day, with an interest rate cut being announced simultaneously by all the world's major central banks except Japan (whose rates are already just 0.5%). In all cases the cut was a half percent.

My previous entry, "The End of the Beginning", written last night, gives a general update on my views of recent events, and an overview of the events of the last 24 hours or so, so do have a read of that (click on yesterday's date on the calendar to the right).  But this morning we have got the details of the UK bank rescue scheme so I thought I would quickly run through them.

It's actually less than two days since my last update, but yet again things are moving fast. Later on I will run through some of the main developments, but first I want to explain what I think is the "why" of what is going on, before the "what". I spent from Thursday to Monday in New York and Washington (and my luggage is still in Washington even though I am now in London, but that's another story!) talking with economists and market experts. They were, needless to say, not exactly a happy bunch!

Well we waited all day to see what the "charge" to the Irish banks of the government guarantee would be, but there hasn't been any indication at all so far.  This is quite a significant issue, as mentioned in this morning's post, so it is somewhat bizarre that there is still no word. 

Anyway, the Irish market as a whole finished up 8%, with AIB up 16%, BofI up 21%, and Anglo up a stunning 68%!  Still, Anglo more than halved this month even allowing for today's jump, while the two big banks were down around 30%, and the whole market was down 23%.

I've finished a full day's meetings with Wall Street economists (those that that are still there - at times over the last couple of weeks when I wasn't sure if there would be anyone left to meet by the time I got here!).  One of the most surprising things was the extent to which they wanted to ask me questions about the Irish bank guarantee scheme announced earlier this week.

Well, another weekend, another bank rescue package. Except this time there were two. And both of them were already rescued last weekend? Confused? Spare a thought for the German and Belgian governments who thought they had put the difficulties of Hypo Real Estate and Fortis, respectively, behind them last weekend, only to discover this weekend that further disclosures of funding difficulties meant that the previous rescue packages were just not big enough.