...and agrees to buy back auction rate securities. Merrill Lynch is now the only holdout...

The FT warns of a coming peak in maturing bank debt - the banks will have to raise hundreds of billions in replacement funding at much higher rates:

Battered US financial groups will have to refinance billions of dollars in maturing debt over the coming months, a move likely to push banks’ funding costs higher and curb their profitability, say bankers and analysts.

The banks’ need to raise capital to offset mounting credit-related losses is forcing them to pay higher interest rates to entice investors.

No wonder that "a survey of 146 banks, investors and hedge funds found that nearly 60% [actually 57% - ac] expect another major financial services firm to collapse within the next six months, and 15% think it will happen in six to 12 months..."

73% of financial players expect another major (in context, Bear Stearns-level) collapse by September 2009? Impressive...