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average personal savings rate in the U.S. slipped to 3.9 percent in the first quarter of 2012 -- the lowest level in over four years

With savings account interest rates near zero, people are left with little incentive to save.

With interest rates running well below the rate of inflation, money in a savings account or other deposit vehicle is actually losing purchasing power with each passing day

you have to consider one additional factor: inflation.

Bond yields are not much higher, and stocks haven't been very rewarding so far in the 21st century either

However, getting the most for your money is only one consideration. Having resources to support your retirement is also an important function of saving, and in this respect people with low savings rates are not behaving rationally.

while low interest rates may seem to discourage saving money, they actually make it more imperative.

other important point of this context is that outside of the government, most people no longer have an employer pension plan to fall back on.

shift from defined benefit to defined contribution retirement plans put the responsibility for saving solely on the employees

people seem to have responded to this trend by saving less rather than more

by choosing more immediate consumption over saving for retirement, people are supporting their current lifestyles at the expense of the future.

this is a decision that many will regret once that future arrives

Bankia SA, the country's fourth-largest lender, saw its shares fall as much as 27 percent during trading in Madrid after the El Mundo newspaper reported the bank was hit with more than €1 billion ($1.27 billion) of withdrawals since the government announced the takeover.

Greek president Karolos Papoulias warned party leaders during unsuccessful coalition talks that about €700 million ($898 million) in deposits have flown out of Greek banks since the May 6 elections, according to a report from Greece's central bank governor, George Provopoulos

the interest rate on Spanish 10-year bonds stood at a worryingly high 6.29 percent. It has risen sharply from below 5 percent in March and is edging toward the 7 percent mark that is considered unsustainable in the longer term.

no more than three months before selling them

The bank wants to find out

whether getting a loan off its books with a quick sale at a deep discount is a better deal financially than the foreclosure process,

nd sign contracts agreeing to rent the home for up to three years at or below market rates

designed to test the market for homes ranging in current value from $75,000 to $1 million

TwinRock Partners, a private Newport Beach firm, recently told potential investors that more than 100 homes it has acquired and rented out over the last two years have produced annualized returns of 8.7%, with the potential for big resale profits if housing prices recover

might even be a shift to the capital markets to raise funds and banks could move into the less regulated areas of finance, known as "shadow banking"

Banks need to meet the new capital requirements, known as Basel III and being implemented as a result of the 2008 banking crisis, by the end of 2018,

The impact of holding extra capital – about 23% more than their current holding of $2.5tn – could reduce returns on equity to 8.5% from the 10.8% average of the 29 banks during the period 2005-2011

in an effort to entice investors the banks may be encouraged to take bigger risks

29 banks will in total need to find $566bn on the assumption that these crucial banks need a 10% capital cushion

need for extra capital will reduce the return on equity

If the banks did not raise equity it would take them three years to raise the extra capital

“Fiscal consolidation in the United States and Europe, flexible exchange rates and structural policies to stimulate domestic demand in the emerging-market economies of Asia,

Delays, meanwhile, could have “severe negative consequences,” leading to “a significantly weaker global economy” and a less stable global financial system.

world economic activity would be 7 per cent lower in 2015.

The clear message here is both sides of this delicate dance not only need to do their part but, just as crucial, they need to co-ordinate their efforts.

A lot of this will sound familiar to anyone who follows global economics from the point of view of the Bank of Canada. Governor Mark Carney also chairs the Financial Stability Board, a G20-linked body tasked with making international finance less of a threat to the wider economy, so he has spoken on these issues many times and outlined the potential benefits of adopting stricter banking rules. But the message about global co-ordination is still ti

mely.

Chinese imports barely grew in April, causing the country's trade surplus to balloon to $18.4-billion (U.S.) from $5.3-billion the previous month, indicating that consumers and businesses in the faster-growing emerging markets are still not ready to pick up

China, until recently, had made strides in narrowing its current-account surplus (which reflects the country’s over-reliance on exports as opposed to domestic spending).

U.S. trade deficit that grew 14 per cent in March

The U.S. itself is now a more balanced economy that relies less on debt-fuelled spending.

But it is smaller and weaker than it was at its pre-crisis peak, and will probably never regain that past form. So its ability to drive global growth is limited

work together and get this right, or both will suffer.