1. World readies rescue
U.K., Germany, France, others reported preparing emergency moves
Nations across the globe reported beginning to roll out new emergency measures to recapitalize banks, guarantee deposits and stabilize the world financial system amid fear of global meltdown.
Germany & Britain
The U.K. government is finalizing plans to invest billions of pounds in four of its largest banks as part of its efforts to stabilize the country's financial system, a move that could lead to the suspension of London stock trading Monday, according to media reports.
Australia & New Zealand
Australian Prime Minister Kevin Rudd said Sunday that his government will:
1. guarantee all deposits with institutions for the next three years to bolster confidence in the banking system.
2. guarantee all "term wholesale funding" by Australian banks operating in international credit markets to ensure they can compete against global rivals getting similar backing.
3. Austraila will double its pledge to purchase residential mortgage-backed securities to A$8 billion.
For its part, New Zealand said it would guarantee all retail bank deposits for the next two years to free up liquidity flows, the Associated Press quoted Finance Minister Michael Cullen as saying Sunday.
UAE, others
Even oil-rich Gulf nations were not immune from the need to protect their banks.
The United Arab Emirates said Sunday it will guarantee all credit risks and deposits at national banks and interbank lending among all banks operating in the UAE, the Financial Times reported.
Poland's Finance Ministry, the central bank and the country's financial watchdog are set to meet the chief executives of Poland's top 10 banks Monday to discuss the current situation on the financial markets, a banking source said Sunday.
2. Germany said ready to give banks up to $135 billion in equity capital IMF: World on brink of meltdown, prepared to act
It is reported that Saturday that Germany was preparing a plan to bail out its financial sector -- not long after saying its banks didn't need such support. Handelsblatt, citing sources close to the talks on the matter, said that the $137 billion fund was part of a bigger package, valued at as much as 400 billion euros. That package also will include interbank guarantees or direct loans, the German paper said.
The FASB ruling amplifies a statement it released with the Securities and Exchange Commission on Sept. 30, with examples of how companies should use their best judgment to value assets that have no active market.
"Determining fair value in a dislocated market depends on the facts and circumstances and may require the use of significant judgment about whether individual transactions are forced liquidations or distressed sales," Friday's FASB statement said.
"In determining fair value for a financial asset, the use of a reporting entity's own assumptions about future cash flows and appropriately risk-adjusted discount rates is acceptable when relevant observable inputs are not available," it said.
Read full FASB position statement.
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