But fear accompanied gloating. The crisis threatens to worsen woes -- inflation, unemployment, weak growth -- of regional powerhouses including Britain, Spain and Italy. Joaquin Almunia, an ideologically moderate Spanish Socialist who is the European Union's economic commissioner, offered a simple analysis.
"It has been a problem of greed," he told El Pais newspaper. "In Europe it can't be said that we did nothing, European banks bought toxic products. . . . Nobody knows when this will end."
Anxiety was acute here in London. Britain's FTSE 100 stock index swung wildly this week, dropping about 8% between Monday and Thursday, then rocketing nearly 9% on Friday.
Among the European economies, it is Britain's that most resembles America's in its vulnerability. The big news of the week drove that home: an announced $22-billion rescue-takeover of the wobbling HBOS bank by Lloyd's TSB.
In ordinary times, regulators would have opposed the merger of the giants as anti-competitive. But beleaguered Prime Minister Gordon Brown, whose economic expertise is one of the last arrows in his political quiver, pushed for the deal.
"The financial tsunami that has engulfed Wall Street since the weekend hit these shores yesterday," the Daily Telegraph declared in an editorial Thursday. "It swept away the country's biggest mortgage provider -- and with it, much of the [financial sector's] regulatory machinery. . . . The government has prevented a banking collapse that would have had unimaginable consequences for the economy."
But a more optimistic school of thought saw the week's events as an inevitable period of reconfiguration from which the markets -- and U.S. economic dominance -- will emerge reasonably unscathed.
This analysis gained ground with the strong recovery of European markets Friday.
In addition to the FTSE, France's CAC 40 rose more than 9% and Russia's RTS index jumped 22% after trading resumed after a two-day suspension.
"This time next year we'll be seeing things back to normal," said Eamonn Butler, director of the Adam Smith Institute, a think tank here. "The last thing we need is to slap more rules on the system. . . . From time to time, businesses fail and the worst thing a government can do is to bail them out because that just passes the cost on to the taxpayer and creates a moral hazard."
