Italy May Test Key Stock Levels

CENTRAL banks are once again coming to the financial system’s rescue. In a move coordinated with its counterparts in America, Japan, Switzerland and Britain, the European Central Bank today announced it would make special, three-month dollar loans to euro-zone banks to cover funding needs over the year-end.

In the past few weeks global markets have focused on the weakening yen, as politicians and business leaders, particularly in Europe have called for a halt in Japan's "weak currency" policy. Tokyo's efforts to stimulate it's export sector have become front and center topic in the financial media, as global businesses become increasingly concerned about the currency war. In fact the number of FT articles containing the word "yen" hit a record recently.

As the European sovereign debt crisis enters its fourth year, there are growing concerns that Spain, the fourth-largest economy in the euro area, could collapse under the weight of its debt and trigger a break-up of the euro zone.  

THIS week, The Economist has quite a lot of material on the crisis in Europe, including a cover that deliberately evokes an earlier cover from another dangerous period.

Mark Carney says his role when he takes over the Bank of England this year will be to help with its “re-founding” and to encourage broader talks on improving Europe’s economic performance.

GIVEN the dismal weather reports from much of the world economy, and most notably the euro zone, the International Monetary Fund's stock of provisions has been looking a little thin. Yet it has not been easy to imagine a straightforward way to increase the funds available to the IMF.

FRANKFURT — The eurozone crisis is not over, France’s reforms are slipping and the Bundesbank has set aside billions in new provisions against what it sees as risky European Central Bank moves, Germany’s central bank said on Tuesday. Presenting Bundesbank 2012 results that showed a sharp increase in its risk provisions, the German central bank’s chief, Jens Weidmann, urged governments to tackle the roots of their troubles with reforms.