The end?

This week, we look at the “end” of the recession, how the release of the Lockerbie bomber could affect the Scottish economy, and at regulating the US banking system.

World recovery?

There are some encouraging signs that the recession is over. But it is too soon for triumph, according to the Financial Times.

Some good news: Germany, France and Japan recorded output growth in the second quarter of 2009. These rises in output are cheering: they represent work created and profits made. Equity markets have also started to rediscover a little of their swagger: the FTSE 100 and S&P 500 now sit at levels not seen since October of last year. ... [I]f it is to be sustainable, the recovery will need to rely on demand from countries that have not recently been big spenders: notably frugal Germany and Japan. But there is still little sign of that kind of shift. All is uncertain, and one must hope that the recovery is rapid. But it would be foolish to assume it.

Scottish snub

The release of Lockerbie bomber Abdulbaset Ali Mohmed al Megrahi is an unnecessary snub to America, writes The Daily Telegraph.

The Scottish Nationalist executive in Edinburgh ... waved its little fist at the might of America and showed it would not be pushed around . ... Yet have the Nationalists thought this through? ... The US is Scotland's largest source of inward investment, with more than 500 American-owned businesses employing 90,000 people. [The] decision may not mean any of these depart, but it could make it harder to attract more — American sensitivity on the issue of terrorism cannot be overstated. ...

Regulating the banks

The Federal Deposit Insurance Corp. (FDIC) is right to demand protections for taxpayers, writes The Wall Street Journal.

Federal regulators are meeting ... to decide on rules for investing in failed U.S. banks, and they're under heavy pressure to ease up on the draft terms that the Federal Deposit Insurance Corp. laid out earlier this summer. While some flexibility may be in order, the FDIC is right to drive a hard bargain for taxpayers. ... We keep hearing from Treasury and Congress that the U.S. needs more and tougher bank regulation ... Yet the FDIC is being roughed up—even by some in the Obama Treasury—for demanding capital and other standards from nonbank investors who won't have to meet current bank holding company rules. This is not the way to restore confidence in the banking system.