So yesterday while the US's 4th largest Bank Wachovia was bought over by Citigroup, the BeNeLux nations bailed out Fortis, Iceland nationalised its third largest bank Glitnir, and German lender Hypo Real Estate was loaned 35bn Euros from the German Banking sector, American legislators continued to procrastinate leading to overnight loses in the Asian markets.
There are fears for other UK banks including the Royal Bank of Scotland, who at one point yesterday were down 20% in value, and Lloyds-TSB who are in the process of rescuing HBOS. James Eden of Exane BNP Paribas said:
"I'm trying to be open-minded about other surprises there might be. Can you imagine Lloyds walking away from HBOS? The share price is telling you there is a chance of that happening."
So while they fiddle on the hill as Wall Street and the wider financial world burn, how can these legislators who fought for major concessions from the original plan then vote against what they fought for? Leaders on both sides of the aisle had negotiated through the weekend a complex deal of bi-partisan compromise. Don't forget this deal stemmed from the Republican Treasury Secretary, was backed by a Democratic House who wanted to have Republican support which was why the details were hashed out in what was allegedly a shouting match at times. Yet when it came to it some were smug enough to say the bankers have got what they deserve.
There's just one problem with that. At the moment the bankers are scared to lend among themselves, let alone anyone else, as none of them are certain what tomorrow may bring their way. Therefore the circulation of money is slowing up. The knock on effect of the bankers freezing up their lending could knock down to businesses heavily and from there to the workers and the electors on the street. One does wonder how many of the Representatives who voted no may well have many electors facing a tougher time come election day as a result of yesterday's vote.