Rescue plans are creeping up everywhere for a hobbled U.S. financial system, though investor
reaction suggests none sufficiently addresses the underlying mistrust that has shaken some of the world's mightiest banks.
The latest is a coordinated effort by key central banks, announced on Wednesday, to create an alternative source of funding for banks in an effort to grease the rusty wheels of
global finance.
Yet despite its sweeping nature, investors say neither it nor the other two plans, a Treasury Department-backed mortgage-rate freeze and a proposed Citigroup-led fund to prop up cash-strapped investment pools, will do much to resolve the crisis.
"Is it going to be the silver bullet that solves the problem? Not even close," said Eric Green, economist at Countrywide Financial in Calabasas, California. "It fails to address a lack of confidence and banks' willingness to lend."
Indeed it has. Interbank lending rates eased modestly Thursday in response to the central bank plan, but remain stubbornly elevated, indicating banks are still loathe to lend one another except at a prohibitive premium.
Just as troubling is a continued exodus by equity investors from the very sector these measures are meant to help. Financial services stocks remain right near their lows of the
year, with the Standard & Poor's financial index more than 22 percent below last spring's record high.
The slide from grace is really more like gliding
And I've found the trick is not to stop the sliding
But to find a graceful way of staying slid
