Before You Blame Bush

... read this.

We’ve heard a ton about how some American banks got carried away with the availability of easy credit and started dishing out money to practically anyone who asked for it.

But it’s a similar situation in Europe. Austrian, Swiss, German and Italian banks own a majority of banks that do business in Eastern Europe. And these foreign banks have lent boatloads of money to countries such as Poland and Romania.

Not a good predicament to be in, to say the least… not for anybody.

According to The Economist, Austria has lent $230 billion euros to the region, which is equal to about 80% of its GDP - a mind-blowing amount.

And the chickens are coming home to roost now, with Austria’s finance minister, Josef Proll quoted thus in Vienna’s Der Standard newspaper: “A failure of 10% would lead to a collapse of the Austrian financial sector.”

Emphasis in the original.

It's the same story all over the place.