The European Union is taking steps to preserve their financial system that might someday reverse the downtrend of their exchange traded funds (ETFs).

The EU’s 27 governments agreed to guarantee private savings up to 50,000 euro for one year and also to set up guidelines on how each country could rescue a failing bank, reports Robert Wielaard for the Associated Press.

This is the first sign of coordination among the EU, and many of the union are going to continue to talk daily in the future to ensure a quick and comprehensive response. In Germany, state-owned savings banks are reporting a flood of new deposits as citizens are looking for safety among the uncertainty.

The Associated Press reports that several state-owned banks - known as “Sparkassen” - said Tuesday that even with a government pledge to guarantee all savings they were seeing scores of new customers.

Australia made a stunning rate cut of 1% today, more than twice what had been expected. This helped diminish the impact of another bad day for bank stocks, reports Pan Pylas for Associated Press.

This is Australia’s steepest rate cut in 16 years, and investors hope that other central banks would follow suit and help to combat the crisis. Wayne Cole and Leika Kihara for Associated Press report that the Bank of Japan may be the only bank not to join the rate cut campaign.

Affected ETFs today include:

• iShares MSCI Australia (EWA), down 32.4% year-to-date (black line)
• NETS DAX (DAX), down 35.1% year-to-date (green line)

Tags | Australia, DAX, Europe, EWA, Germany