The New York Times fronts a story saying that recent food-market problems are eroding resistance to genetically modified crops. With prices soaring for staples like rice, once-skittish consumers and industry groups are modifying their principles.

Even Europe is lowering its guard, the Times reports, resulting in our Quote of the Day:

The chairman of the European Parliament’s agriculture committee, Neil Parish, said that as prices rise, Europeans “may be more realistic” about genetically modified crops: “Their hearts may be on the left, but their pockets are on the right.”

With food riots in some countries focusing attention on how the world will feed itself, biotechnology proponents see their chance. They argue that while genetic engineering might have been deemed unnecessary when food was abundant, it will be essential for helping the world cope with the demand for food and biofuels in the decades ahead.

The Times says if the trend continues, it will be a big boost for American farmers, who grew half the world’s biotech crops in 2007.

British bailout

The Bank of England will inject $100 billion into the country’s banking system in an effort to keep its institutions lending and its economy moving.

Like the Federal Reserve, it’s taking as collateral stuff that just about no one will touch—the mortgage-backed securities that sparked the financial crisis—but it will hold on to them for much longer instead of the month or so the Fed does. The U.K. is facing a housing bust similar to that of the U.S., though The Wall Street Journal on A2 says futures markets expect American homes to fall an average 27 percent, roughly twice as far as they expect British homes to depreciate.

The Financial Times says the British government is at pains to insist this is not a government bailout, and it says the banks will hedge their risk by valuing the securities at lower than face value.

Nat City bailout

A group of investors is about to bail out Cleveland bank National City to the tune of $6 billion to $8 billion, the papers say. The investors, led by private-equity firm Corsair Capital, will get shares in the tenth-biggest U.S. bank for $5 apiece, about 40 percent below their price on the market at close on Friday.

The Plain Dealersays the bank saw “strong demand”, but the Journal says that other banks kicked the tires of their weakened competitor, whose shares are off 78 percent in the last year, but passed. They would have had to take massive write-downs of National City’s loans they assumed.

It’s yet another big-time dilution of value for bank shareholders, who will also see their dividends slashed 95 percent. Washington Mutual and Wachovia each took similar-sized recapitalizations earlier this month.

Small-bank woes

The Journal on page one looks into the problems facing the country’s smaller banks. It finds that plenty have them but that not many observers are predicting a repeat of the scale of bank failures of the late 1980s savings-and-loan crisis.

By historical standards, the U.S. banking system appears overwhelmingly sound. At the end of 2007, FDIC-insured financial institutions had a combined $1.35 trillion in capital, with an overall capital ratio of 12.8%. Federal regulators consider banks well-capitalized if that ratio—the percentage of capital to risk-weighted assets—is more than 10%.

But how much of that capital is already worth less than face value and will have to be written down?

Dodgy bookkeeping

The WSJ in a C1 Heard on the Street column says that Wall Street banks are delaying the impact of billions in securities write-downs and investors are starting to ask why.

The paper says banks are using a legal accounting trick to keep from reporting the write-downs on their income statements. It mentions Merrill Lynch, which last week took $6.6 billion in write-downs in the first quarter that resulted in a $1.9 billion loss. But the firm has another $3.1 billion in write-downs, too, but didn’t count those as a loss.

Analysts also are sounding the alarm that these losses may eventually come back to bite investors, even if they are presently tucked away in a little-noticed corner of the balance sheet. In a recent report, Credit Suisse analyst David Zion estimated that companies in the Standard & Poor’s 500-stock index were sitting on about $80 billion of these unrealized losses as of the end of last year.

After Merrill reported its results, Punk Ziegel & Co. analyst Richard X. Bove threw up his hands in frustration over the way corporate results were being masked by accounting practices, including the ability to book some losses in shareholders’ equity rather than profit.

Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu. Follow him on Twitter at @ryanchittum.