Chancellor Merkel will meet the heads of the world's five leading financial organization in Berlin. It is part of Germany's effort to drum up support for a new global regulatory system for financial markets. 

Merkel is expected to build on long-running calls to inject transparency in global markets to avert a repeat of the wrenching economic crisis currently engulfing the world as she meets the chiefs of the world's top financial institutions at a meeting in Berlin.

The chancellor will host Pascal Lamy, director general of the World Trade Organization, World Bank president Robert Zoellick and International Monetary Fund managing director Dominique Strauss-Kahn. Also expected to attend are Angel Gurria, secretary general of the International Labour Organization and Juan Somavia, director general of the Organization for Economic Cooperation and Development.

Merkel's discussions in Berlin form part of the buildup to a summit of Group of 20 leading industrialized nations and emerging economies set to take place in London on April 2.

Germany's Deutsche Bank has posted an historic annual loss, including a record loss in the fourth quarter of 2008. CEO Josef Ackermann attributes the setback to "weaknesses" in the institution's business model.  

Deutsche Bank, Germany's largest, said it suffered a net loss of 3.9 billion euros ($5 billion) in 2008, confirming reports from mid-January. But despite the loss, the bank said it would pay out a dividend of 50 euro cents per share.

 

A net loss of 4.8 billion euros was accrued in the fourth quarter alone, compared with a net profit of 1 billion euros in the fourth quarter of 2007.

 

"Operating conditions in the quarter were completely unprecedented, and exposed some weaknesses in our business model," Ackermann said in a statement.

 

The United States is experiencing its worst crisis in decades. Obama is trying to fight it by preparing one gigantic economic stimulus program after the other. But the hangover is inevitable, and if the desired economic miracle doesn't materialize, it will be a massive one.

The most attractive thing about globalization is that it has enabled us to develop international tastes in our shopping. Our wine comes from France, our flat-screen televisions from Korea and our elegant shoes from Italy.

But you can also find good ideas for governing by shopping for them around the world. The catalogue of ideas is packed. Indeed, many countries have answers to the question on everyone's mind these days: "How do I rescue my economy?"

Harvard econ Prof. Elizabeth Warren, testifying before a Senate Banking committee hearing underway now to judge the performance of the $700 billion bailout, said that the Treasury overpaid by $78 billion in its first round of investments into troubled banks.

Warren said that Treasury spent $254 billion to purchase assets whose actual value was only $176 billion, "a shortfall of about $78 billion," she said.

Warren said Treasury failed to "price for risk," and used a metaphor to explain: It's as if Treasury was looking at 10 paintings and promised to pay $1 million for each, even though "one is a Picasso, one is a Rembrandt" and the other eight are not.

"There may be good policy reasons for overpaying," Warren said, "but without clearly delineated reasons, we can't know that."

A list of the many thousands of people who invested with Bernard Madoff has been released, including several prominent British society figures and a number of well-known Americans from the world of politics, sport and Hollywood.

The 162-page roll call of potential victims of Madoff's alleged $50bn (£34.3bn) fraud was published late last night. Among the 13,567 individuals, trusts and private bank accounts is the name John G Malkovich, although there is no confirmation that this is indeed the famous actor.

The highest-profile British name is Lady Victoria de Rothschild. De Rothschild, formerly married to Sir Evelyn, was herself embroiled last year in a Tory donor row. Also on the list of high-society financiers, actors and sports stars is Lady Evelyn Jacobs, wife of the Liberal Democrat-supporting life peer who had an estimated fortune of £128m last year.

EUOBSERVER / BRUSSELS - European wind energy projects are finding it hard to get finance as the economic crisis begins to pinch, with smaller manufacturers announcing hundreds of lay-offs despite the robust performance of the sector heading into the downturn.

"There was such high demand six months ago, you had to stand in line to purchase windmill parts, but now the order books seem to have lightened somewhat," a senior EU financing official told EUobserver.

Some smaller wind projects are having trouble finding financing

Two days ago, Siemens Wind Power laid off some 400 production workers in Denmark, following similar recent cutbacks at LM Glasfiber - also based in Denmark - and the largest producer of wind turbines in the world.

Experts, such as Christian Kjaer of the head of the European Wind Energy Association say actual orders for turbines in Europe have not dried up. But expectations of explosive growth in the sector are being re-adjusted.

"The lay-offs are not because of a drop in demand - yet," the EU official explained. "Hiring had been based on the expectation that such growth would continue, and now there are doubts that it will."

By now, it's clear to everyone that we have inherited an economic crisis as deep and dire as any since the days of the Great Depression. Millions of jobs that Americans relied on just a year ago are gone; millions more of the nest eggs families worked so hard to build have vanished. People everywhere are worried about what tomorrow will bring.

What Americans expect from Washington is action that matches the urgency they feel in their daily lives -- action that's swift, bold and wise enough for us to climb out of this crisis.

Because each day we wait to begin the work of turning our economy around, more people lose their jobs, their savings and their homes. And if nothing is done, this recession might linger for years. Our economy will lose 5 million more jobs. Unemployment will approach double digits. Our nation will sink deeper into a crisis that, at some point, we may not be able to reverse.

US officials are examining ways gradually to convert government stakes in banks into ordinary shares as banks accumulate losses, according to people close to the discussions.

The point would be to provide a drip-feed of additional common equity as needed to cover losses - without the government owning a larger stake in the banks than is necessary.

One idea that has been considered by policymakers is for the government to change its existing holdings in the banks, which have taken the form of preferred shares - non-voting stock that carries a fixed dividend - into convertible preferred shares that could be converted into common stock.

Under this proposal, the shares would automatically convert into common equity if there were a decline in a bank's health - as measured by its so-called tangible equity ratio, for example. The government may also make future capital injections in the form of such convertible preferred shares.

Infrastructure investment will have far more impact than tax cuts for governments trying to boost economic growth in the face of the global recession, according to the International Monetary Fund.

The IMF, which has urged faster and bigger restructuring plans for the financial system, also broke a taboo by calling for limited and temporary nationalisation of troubled financial institutions when shareholder equity had been wiped out by collapsed asset prices.

U.S. taxpayers are being shortchanged by about $78 billion through the Treasury Department's bank bailout, the panel overseeing the program said.

The Treasury, when it was headed by Secretary Henry Paulson, received bank assets worth about $176 billion in exchange for capital purchases of $254 billion under the Troubled Asset Relief Program, the Congressional Oversight Panel said in a report today.

"The loss estimate is conservative," said Representative Alan Grayson, a Florida Democrat on the House Financial Services Committee. "It could turn out that those assets in the end are worthless. These are massive handouts to favored institutions to try to make up with taxpayer money the mistakes they made with investor money."

The country moved into its second year of uninterrupted job losses last month, with companies shedding another 598,000 jobs and the unemployment rate moving up to 7.6 percent, the Labor Department reported on Friday.
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For the last several months, analysts said, the United States has increasingly been trapped in a vicious circle of slumping consumer demand, falling business investment, mounting losses in the banking system, and rising unemployment, which was 7.2 percent in December.
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On Thursday, the nation's retailers reported that sales fell 1.6 percent in January, the fourth consecutive month of steep sales declines.
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For comparison, the unemployment rate was 4.9 percent in January 2008. But some analysts contend that the current unemployment rate understates the labor market's problems because the percentage of adults participating in the labor force has slumped in recent years, and those people are not listed as "unemployed."

Peter Morici, an economist at the University of Maryland, estimated that if the labor force participation rate today was as high as it was when President Bush took office, the unemployment rate would be 9.4 percent.