By Greg Peel

The Dow rose 183 points or 1.7% while the S&P gained 1.8% to 1164 and the Nasdaq added 1.9%.

And then there were two. Last night the Dutch parliament passed the EFSF bill leaving only Malta and Slovakia to hold their votes early next week. The trick will then be what to actually do with the E440bn fund. We know that European leaders finally agree that bank recapitalisation ahead of an orderly Greek default is the necessary plan, but the details of that plan are yet to be determined.

The expectation is that the details are now being nutted out and will be presented at the EU summit on October 17. This leaves another ten days of room to disagree, bicker and disrupt, but one gets the felling Europe has finally figured it out. Figured out, that is, that it's time to show a united front. No end of damage has been done to reputations in the past two years, but then one can hardly look to the US as a role model either.

Last night Jean-Claude Trichet held his final press conference before the end of his eight-year tender as ECB president. Previously markets had assumed the ECB would cut its cash rate in the face of the turmoil but Trichet had poured cold water on that idea, and true to form he left the ECB cash rate steady at 1.5% last night. However he did announce a raft of other "unconventional" policy measures.

Those measures are described as "tried and trusty" by the Wall Street Journal given Trichet is reverting to strategies put in place in 2008 after the fall of Lehman. We must recall at this point that the eurozone does not have a common bond to replicate the US Treasuries or UK gilts for example, so any form of quantitative easing has to be more imaginative than just printing money to buy sovereign paper.

The ECB will restart its program of buying covered bank bonds next month and will hold two separate tenders of one-year refinancing for eurozone banks. Echoing the Fed's new policy of specifying timing, the ECB will provide banks with as much liquidity as they need until at least July 2012. In other words, we might now be able to assume that whatever happens on the default front, from Greece to anyone else, European banks will not crash under the weight of losses.

Where will this funding come from? Well that's where the EFSF comes in. It has long been noted that E440bn might cover Greece, Portugal and even Spain but not Italy, but we are yet to find out what sort of leverage will be applied to the EFSF and what sort of complex system will be put in place to feed the ECB. But perhaps the salient point here is the message European officials are now sending to the so-called "bond vigilantes" ? a message which basically suggests "we're bigger than you are so you might as well back off". For two years we have seen nothing but band-aid measures to support Greece and the other PIIGS which have not been sufficient to prevent financial markets from undermining the capacity of the peripherals to finance their budget deficits.

The Poms also got into the act last night. There's been a lot of thigh-slapping around The City of late as the British have reflected on their sensible decision not to join a common currency which has brought its continental neighbours to their knees more effectively than Nelson could ever have managed. And there has also been talk of leaving the EU. But the UK has not been immune to the goings on in Europe and its economy is feeling the fallout. Last night the Bank of England announced a 75bn pound increase to its asset purchase program to 275bn pounds, which has been dubbed a British "QE2".