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The Federal Open Market Committee (FOMC) is holding its two-day meeting which starts today, and the decision will be released tomorrow at 12:30 p.m. At 2:15 p.m., Bernanke will hold his second press conference, as Bernanke tries to continue to be more open about FOMC policy, and have a direct dialogue with the average American, as opposed to just the financial markets.

No one expects the FOMC to do anything to the federal funds rate, which is currently 0-0.25%, the language is the key here. $600 billion whale is known as " QE2" is ending soon, and no one in their right mind expects the Fed to announce a " QE3" now. Not unless the markets took a plunge, and the economy slowed to a point where even the tortoise from the " Tortoise and the Hare" was beating it in a race. 

That's not exactly a handy characteristic when Greek default seems almost inevitable. Euro policymakers this weekend failed to agree to terms on a 12 billion-euro ($17b) bailout loan due next mth to Greece, warning the Greek govt must 1st show it is taking austerity seriously. Apparently mere riots aren't enough for these guys.

Financial institutions across the Continent share a terrifying trait with Lehman Bro  B4 its 2008 collapse: they rely too much on borrowed money, esp the cheap, short-term loans that are vulnerable to a mkt shock. If the EU leverage numbers sound familiar, it's be'cos they are in line with the leverage ratios seen at the big U.S. investment banks b4 the financial mkts started their nervous breakdown in 2007.

Lehman and Bear Stearns, both smallish investment banks that gorged on real estate during the bubble, leveraged at more than 30-1 while Goldman Sachs (GS), Morgan Stanley (MS) and Merrill Lynch were well into the 20s.

What's notable is that, most reckless banks, by measures at least, reside not in  gonzo Greece or profligate Portugal, but in the allegedly responsible states at the so-called core of Europe, Germany and France – the very banks that are most exposed to a Greek default, with some 90 billion euros ($129 billion) at stake.

Though it's hard to open the business section lately without finding a story about Germany's economic renaissance, thrift and prudence don't seem to characterize German banks. They hold 32 euros in loans for every euro of capital they have on hand, according to International Monetary Fund data. Lehman's leverage at the time of its collapse was 31-1, if you're keeping score at home. Either way it means a 3% loss leaves the taxpayers picking up the tab. Yes, that again.

The Germans aren't alone in Lehmanville: Belgian banks are using 30-1 leverage and French ones 26-1, the IMF numbers (see chart, right). All told, banks across the 17-country euro area average 26-1 leverage – double the ratio in the US. Against all odds, Euro institutions have managed the nifty trick of making U.S. banks look good.

And in another similarity, the European banks are heavily reliant on short-term market funding, from sources such as the U.S. money funds that are among the biggest wholesale lenders on the planet. History shows that a market panic can make those funds suddenly unavailable, potentially putting an already stretched European Central Bank even more on the spot.

Yet it's not clear the Europeans have picked up just yet on how this year might come to rhyme with 2008.  While Germany has backed away from its demand that private sector lenders be forced to accept reduced repayment terms, there is still no sign that Europe's leaders will soon come to their senses and hammer out a package that ends the siege once and for all.

All this tightrope walking is unnerving the staff at the IMF, which warned last week that " though there has been progress on banking system repair, the pace is too slow."

For now, there's no reason to believe a default is imminent or that banks would be unable to handle the Greek storm. Liquidity is still ample and the financial system isn't as hyped up as it was three  - four years ago. But the sight of overextended banks in the middle of a crisis is never reassuring, no matter how familiar it may be.