Germany remains opposed to giving the European Central Bank a strong role in defending the euro, while France demands that the ECB do whatever is necessary to hold together the currency union. German Chancellor Angela Merkel said the European Financial Stability Facility, not the ECB, is the best mechanism for dealing with the eurozone's sovereign-debt crisis.
Asian-Pacific stock markets slid after Spain's cost of borrowing reached its highest level since the country adopted the euro. Hong Kong's Hang Seng Index fell 1.7%, Japan's Nikkei 225 declined 1.2% and South Korea's Kospi dropped 2%. China's Shanghai Composite and Australia's S&P/ASX 200 lost 1.9%. India's Sensex was down 1% at midday.
The World Bank published its inaugural "Financial Sector Assessment for China," which scrutinizes the country's financial system and its regulation. Three commissions oversee the sector: the China Banking Regulatory Commission, the China Securities Regulatory Commission and the China Insurance Commission. The People's Bank of China also plays a supervisory role. The World Bank report suggests establishing a permanent Financial Stability Committee to consolidate supervision.
The U.K. government agreed to sell Northern Rock to Virgin Money at a loss, suggesting that officials have given up hope of realizing profit on holdings it acquired in troubled banks in the wake of the financial crisis. Northern Rock was nationalized about four years ago. The sale, for £747 million, leaves British taxpayers with a loss of £400 million or more on their investment.