So says the Wall Street Journal’s Damian Paletta, Carrick Mollenkamp and John D. McKinnon about the plan to guarantee billions in bank debt and insure all bank deposits. This new moves to stave off the ever-growing Wall Street fallout would likely be coordinated with Great Britain. The British, going through a crisis of their own, have already announced that the equivalent of $432 billion in bank debt would be guaranteed.

In order for the Federal Deposit Insurance Corporation to back government lending to banks, the FDIC would have to invoke a rarely used regulatory rule that admits the U.S. financial system is at "systemic risk."

A better article on backing up bank debt might come in a day or so after the White House has decided how much it will cooperate with the British plan. It is astonishing, though, to think that just last week the bailout law Congress passed was considered an unprecedented government intervention into the markets. Now the two-week bailout debate looks like just a chapter in the story of the federal government’s response.-MB

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