Reply #8: This is probably a dumb question...

[BrendaBrick]

RE: "This means that the investment bank's European derivatives exposure is now backstopped by U.S. taxpayers." But wouldn't the EFDI (European Forum of Deposit Insurers)or maybe some other European agency(s) factor in this somehow to bear the brunt?

I googled "European equivalent to FDIC" and came up with this:

The European Forum of Deposit Insurers (EFDI) was initially established in October 2002 in Vienna by 25 Deposit Guarantee Schemes (DGSs).

Considering the EC’s growing interest in EFDI and its increasing responsibilities, EFDI decided to change its legal status and become an International Non profit Association in Belgium. EFDI became formally an INPA on the 22nd of June 2007.

EFDI now represents 56 DGSs from 41 countries of the European Area.

EFDI was originally founded because the European DGSs felt the need to convene in order to contribute to the stability of the financial systems, while promoting European co-operation in the field of deposit guarantee.
Since its very beginning, EFDI has aimed at facilitating dialogue among members as well as exchanging expertise and information on issues of mutual interest and concern.
Moreover, EFDI is also committed to:

discussing common topics;
exploring cross-border issues including improvements in co-operation between European countries;
being the liaison with non European DGS;
discussing the application of the EU Directive 94/19/EC on Deposit Guarantee Schemes;

http://www.efdi.net/aboutUs.asp

Or the IADI (International Association of Deposit Insurers) http://www.iadi.org/aboutIADI.aspx