On paper, the idea of creating an uber-watchdog with knowledge about the risks in banks' balance sheets and information on how much they depend on central bank funding, appears a perfect recipe for an effective supervisor.

The European Commission is expected to lay out the blueprint in September, giving lawmakers time to discuss changes ahead of an end of year deadline, which must be met before the euro zone's bailout fund can start recapitalizing banks direct. One German official said it was "TOTALLY UNREALISTIC" to expect the new set up to be up and running in six months - some experienced in euro zone politics think it could take 2-3 years - but ECB insiders say they already have a clear outline of their plans and that talks with Brussels have already started.

Much of the detail is still to be decided, but plans as they stand would see the ECB supervise the 25 to 30 large, multi-national commercial euro zone banks such as BNP Paribas, Deutsche Bank, Santander and UniCredit. "I don't think it's realistic to build the ECB up into a single, unified bank supervisor of all of Europe's thousands of banks ... but we will find a sensible solution in terms of a division of labor," the ECB's Ewald Nowotny said this week.

Smaller banks would remain under national regulator control, while those based in the UK, Sweden and other countries not in the euro will not take part as they have no say in the ECB.

Last week’s summit took important steps to stop the immediate panic. But the big economies of Italy and Spain are shrinking and there is no agreed long-term vision for the zone. In other words, the crisis is still there.

Some countries like Germany want much more common decision making, but others fear the loss of sovereignty. Meanwhile, many weaker nations want to pool their debts – an idea rightly rejected by Merkel.

Europe’s people are not ready for full political union. So the best solution would be to keep the loss of sovereignty and debt-sharing down to the minimum. But the summit kicked these big issues into touch.

The dinosaur is less terrifying than it was a few weeks ago. But it is still there.

China, the euro zone and Britain all loosened monetary policy on Thursday, signaling growing alarm about the world economy. But to little avail.

More than 3,000 temperature records have been shattered in the US this past week, from June 28-July 4, 2012, according to NOAA. The tally of record high temperatures during the time period is 2,253, and the tally of maximum low temperature records is 936. From July 1-July 4 alone, more than 1,000 record highs have fallen, while more than 600 maximum low temperature records have been broken.

Parts of the UK were under a severe weather warning today as forecasters predicted up to a month's worth of rain could fall over 24 hours. Yorkshire, the North East, the Midlands and East Anglia are likely to take the brunt of the severe weather late today, the Environment Agency said. June saw long, prolonged rainfall and short but exceptionally heavy showers, and ended with freak storms which battered areas of the Midlands and the North East. The exceptional amount of rain caused floods in Wales and parts of England.

"Firearms, offensive weapons and other material were later found hidden inside, prompting police to take action to trace and arrest the driver, passenger and others suspected of being involved." It follows the arrest of five men and a women in an intelligence-led anti-terrorism operation in nine addresses across London yesterday.

David Handley, of the campaign group Farmers for Action, said there was great “anger and frustration” among dairy farmers that they had been “robbed”.

He told the BBC: “If we don’t get reinstatement [reversing price cuts], we are looking at disruption of milk supplies. That could come in many forms.” Mr Handley said the protest would probably be held during the Olympics, adding: “Part of our action is likely to disrupt that and that is unfortunate, but at the end of the day we are in desperation street.”

Of the three, the surprise move was from Beijing which lowered its lending rate by 31 basis points to 6 percent following an interest rate cut just a month ago which also came out of the blue. The European Central Bank cut rates to a record low 0.75 percent following a dire run of economic data. But it steered clear of bolder moves such as reviving its government bond-buying program or flooding banks with more long-term liquidity.

The Bank of England, whose rates are already at a record low 0.5 percent, said it would restart its printing presses AND BUY 50 BILLION POUNDS ($78 BILLION) OF ASSETS WITH NEWLY CREATED MONEY to help the economy out of recession. "It is a surprise that they are moving so quickly. It shows that policymakers' concerns about the global economy have only grown," Mark Williams, an economist at Capital Economics in London, said of the People's Bank of China's action.

A raft of Chinese data is due next week including second quarter GDP which officials may know to be poor, he said. But they may also be trying to foster suggestions of acting in concert. "Policymakers may have felt that cutting rates on the day that the ECB (did) the same would deliver a bigger impact, encouraging talk of a coordinated response to the slowdown in the global economy," Williams said. "Again, though, this might simply underline the seriousness of the downside risks."

Kids Company, a charity for disadvantaged children, believes that as many as one million children are living with ‘food insecurity’ and are unsure where their next meal is coming from. These children typically each just ten meals each week - 11 short of the 21 meals a week needed for children to stay healthy.

The charity highlighted a series of cases including a hungry child who stole frozen meat and ate it raw and another who drew pictures of food on a paper plate and tried to eat them. One mother was forced to continue exclusively breast-feeding her son until the age of 18 months since she could not afford food. The charity said some parents were ‘just not managing to have food in the house’.

The number of children who rely on Kids Company services for their main meal of the day has more than doubled from 30 a week last year to 70 in 2012. The average age of these children is just ten but many bring younger siblings and even babies. The charity highlighted a series of recent surveys, including a poll of 515 teachers by the Prince’s Trust, which suggest that about half of staff regularly see pupils suffering malnutrition or showing signs of not having eaten enough.

This means that between half a million and a million UK children are affected - or two in every class at school, it was claimed. A separate survey of 1,116 parents by Netmums found that 62 per cent knew local families where children are going hungry because their parents cannot afford to buy all the food they need. More than half - 56 per cent - were aware of parents not feeding children because they are abusing drugs or alcohol. Rising poverty levels and poor parenting are thought to lie behind the trend.

China, which has agreed to the transaction in principle, would also build a base of operations near Riyadh for the new Saudi purchases.

As we reported last year, Saudi Arabia has struck a deal with Pakistan for the availability on demand of a nuclear warhead from Islamabad’s arsenal for fitting onto a ballistic missile. Riyadh owns a direct interest in the two most active Middle East issues: Iran and Syria.

He then spoke via phone to Greta Van Susteren of Fox News, confirming: “Yes, I believe that we will end up in a war with Iran because I think [Mr] Obama views that as politically good for him. I have said for a year and a half that in the end, somewhere before the election we will end up in a form of war with Iran, and I think he’s doing it for political reasons.”

Moneyval, the Council of Europe department that evaluates how effectively member states are fighting money-laundering, will give the Vatican one month to respond to the report before it is made public. The Vatican has been trying to join a so-called "white list" of states that comply with Organisation for Economic Cooperation and Development standards on financial transparency. The Moneyval report, based on consultations and meetings with inspectors, is expected to be a key step along the way.

Much of the damage to the power grid was blamed on last weekend's rare "derecho," a big, powerful and long-lasting wind storm that blew from the Midwest to the Atlantic Ocean. Violent weekend storms and days of record heat have killed at least 23 people in the United States since Friday.