The European collective response

It turns out there won’t be one.  In fact we are seeing the opposite:

"We will work cooperatively and in a coordinated way within the
European Union and with our international partners," it [the statement] added. "In the
spirit of close cooperation within the European Union, we will ensure
that potential cross-border effects of national decisions are taken
into consideration."

This language was seen as a rebuke to Ireland, which last week
decided to offer guarantees to all Irish depositors. The decision,
taken unilaterally, irked Brown and his lieutenants in London, who
feared it might lead Britons to pull their money out of British banks
and put it in Irish banks instead to enjoy the guarantee.

British depositors were already crowding to get into the nationalized Northern Rock but they were turned away at the proverbial door.  Other news is that the German government-led bank consortium to rescue Hypo Bank has fallen apart, not a good sign.  The German government has today moved to guarantee all "private savings deposits" [private Sparanlagen], also not a good sign.  Which other countries will now follow suit?  All of them?  Europe as a whole lacks a safe asset as focal, liquid, and available as T-Bills and now that is becoming a problem.