Money | financial crisis In Financial Crisis, Europe Leads the Way (for a Change) Investment in banks proved better strategy than mortgage bailout By Matt Cantor Posted Oct 19, 2008 8:08 AM CDT Copied European Central. Bank Pres. Jean-Claude Trichet, UK PM Brown, EC President Jose Manuel Barroso, France's Pres.Sarkozy and Pres. of Eurogroup Jean-Claude Juncker, from left, meet Oct. 12. (AP Photo/Philippe Wojazer, Pool) The US has long considered Europe to be the economic equivalent of a doddering old uncle, but this week it was oldster leading whippersnapper America by the hand through the most serious crisis since the Depression. Europe, seeing the need for a sturdier fix than the mortgage-bailout Band-aid Washington proposed, led the charge by investing in its own banks, a move the US followed only after much hand-wringing. But it remains to be seen whether the trend will continue, the New York Times reports. “Europe showed the capacity to respond to a crisis more quickly than the US,” which “went through agonies to come up with a plan,” said a former European Commission official. The effects were shown in the markets: Europe’s stock exchanges bounced 8.2% this week, while the US saw a more modest 4.5% boost. The key to Europe’s success was its focus on the problem’s roots: not mortgages, but faith in banks. Read These Next Rubio says the fate of Iran's conversion facility is what matters. Her blood isn't compatible with anyone else's. Some of the most explosive Diddy allegations are dropped. Fan who taunted Ketel Marte's mom has been banned by MLB. Report an error