Europe Races to Stem Crisis 10/5/11-large bank, Dexia SA, on the verge of government breakup. Spent past 3 years trying to undo a decade of over-zealous lending to gov’ts.-Dexia’s troubles have lifted borrowing costs for many U.S. cities and town who had received cheap financing from Dexia-Drexia agreed to “backstop,” or purchase unsold bonds in the $29 trillion municipal-debt market… interest rates on those variable-rate bonds fluctuate through daily or weekly sales called remarketings, in which big investors can either roll over their holdings at the market rates or opt out. -Italian debt downgraded three notches by Moody’s-“Europe’s interlocking sovereign debt and banking crises are feeding into one another”-Banks are loaded up with sovereign debt and look to financing from governments FDIC’s Latest Closings: Its Own Offices 10/2/11-FDIC will close 2 out of 3 temporary field offices it set up to handle increased bank failures-1,000 US banks disappeared since end of 2007 in failures (less) and M&A (mostly)
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sovereign debt, -JP Morgan, Fed Ties Purse, temporary field offices