The good news:

The federal government said on Sunday it would guarantee all money deposits for the next three years, while Europe moved to guarantee new medium-term bank debt, inject capital into the banking sector and unfreeze commercial paper markets, giving companies vital access to funding and help stave off an economic slump — Business Spectator.

On which our market rallied through the morning.

Now the bad news, thanks to Will Hutton in the Observer:

The problem is that the markets no longer have any faith that the world financial system they helped create has any future. The model is bust. It is encouraging that both the Americans and Germans are now moving towards what they considered ideologically unthinkable a fortnight ago — they are preparing to follow the British lead, take big public stakes in banks and offer guarantees to the interbank market.

But while this is a necessary condition for stabilisation it is not sufficient. What needs to happen on top is an assault on the dark heart of the global financial system — the $55 trillion market in credit derivatives and, in particular, credit default swaps, the mechanisms routinely used to insure banks against losses on risky investments. This is a market more than twice the size of the combined GDP of the US, Japan and the EU. Until it is cleaned up and the toxic threat it poses is removed, the pandemic will continue. Even nationalised banks, and the countries standing behind them, could be overwhelmed by the scale of the losses now emerging.

We may have a little way to travel yet.