Is Europe should imitate the U.S.?

While the adoption of rescue plan for the U.S. financial system still was not taken by Congress, is a fact that will have a happy ending. Is that there is almost unanimous agreement that it is the only solution that can be found to this crisis. Indeed, the approval of the rescue plan generated great expectations in the rest of the world, especially in developed economies with European countries who hope to head the United States take over the cost of the crisis, while they try stay out until the worst happens. Do not forget that not only U.S. was responsible for the crisis facing the world right now. Most developed countries attended the party but low-quality assets with high profit potential while the upward trend was prevailing. But when has not yet approved the plan to rescue the U.S. financial system, the International Monetary Fund is entering Europe by suggesting action to prepare contingency plans for a possible worsening of the crisis in the region.

The department's director for Europe at the IMF, Alessandro Leipold, warned: "The problem could be less severe in Europe, but (Europe) should not be complacent and should be prepared for the worst case scenario?. Similarly aligned IMF Managing Director, Jaime Caruana: "It is important that countries prepare their contingency plans? ... Are you asking the IMF that Europe begins to design a rescue plan as the U.S.. UU.? worth remembering that shortly after learning of the proposed toxic asset rescue the U.S. financial system, the European Union ruled carry out a plan of this nature. In that sense, I could hear the Economic Affairs Commissioner Joaquin Almunia in Brussels in the European saying: "The situation we are facing in Europe is less severe and the Member States (EU) does not believe in this time a plan is necessary as the United States?.

While no major developments are emerging problems of financial institutions in Europe, some are already rearranged to avoid suffering to the deterioration of economic conditions. In this sense, both the British bank HSBC Holdings plc (LSE: HSBA, NYSE: HBC) and the banking and insurance group Belgo-Dutch Fortis, are cutting costs and increasing liquidity. HSBC said it will cut 1,100 jobs due to financial crisis. About half of the positions affected are in the UK, especially in investment banking section in London. The agency announced last month that its half-yearly profit fell 28% to U.S. $ 10,200 million. The banking and insurance group Belgo-Dutch Fortis, announced it would sell assets to 10,000 million euros. The authorities denied any possibility of problems for the company and explained: "It's far from current bankruptcy of Fortis. There is the slightest risk that we face a problem like that?. Does Europe need to have a bailout similar to the U.S.? The first impression that there is no. While the crisis has affected the financial system in Europe and probably will be clean entities to improve their balance sheets of the same quality, it seems that there is a risk of the magnitude of crisis facing the U.S.

But at this point in the circumstances, and given the great uncertainty in the markets, it would be desirable that at least the European countries work on a contingency plan beyond the probability of that has to be used is minimal. The suggestion has more of a psychological reason if you want. It would be highly valued by the market which would find peace in knowing of the existence of a plan of action in case the situation gets worse. As an example to understand the importance of such signals to the market, it remember what Henry Paulson said, as he sank Lehman Brothers (NYSE: LEH), the U.S. government had no plans to continue using the money for families in more bailouts of institutions. Knowing that the risk for any inconvenience was very high, threatened the entire U.S. financial system. I understand this, that European countries should send reassuring signals to the market through the development of contingency plans. For now, from the monetary institutions in Europe, with the ECB and the Bank of England in the lead, working to provide all the liquidity that the market required to remove any tensions that may arise, while awaiting a nod from U.S.

with the approval of mega rescue. We will meet again tomorrow, Horacio Pozzo