There is a gigantic hole in the balance sheets of Europe’s banks – from France to Germany, from Spain to Italy. Even the UK, which thought it had put all this behind it with an unprecedented bailout of major banks in 2008, cannot be excluded.

It is two years since the financial services sector of many of the world's leading economies were plunged into disarray.

The uncertainty this generated meant that individual and institutional investors were very reluctant to participate in the financial markets resulting in a dramatic decline in asset values, credit becoming largely unavailable and, as a result, liquidity  became very difficult to generate. Rapid intervention by national governments, directly and through central banks and regulatory agencies, was undertaken in an attempt to restore confidence in the markets and to keep a number of financial institutions solvent. Some were allowed to fail.

From Ellen Nakashima, the Washington Post:  The European Union has reached an agreement with the United States that will allow European bank data to continue to be shared for counterterrorism purposes, but only after liberal members of parliament secured stronger privacy guarantees.

One unexpected byproduct of the global financial crisis has been a boom for Islamic banks.  AP business writer Emma Vandore explains:

France is becoming the latest country to woo Islamic banks, which avoided much of the damage from the subprime mortgage crisis by following strict principles laid out in the Quran — as the global financial crisis broadens the appeal of Islamic finance. 

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The world's leading banks have coordinated their efforts to allow for $180 billion in extra liquidity.

Bankers claim Russia is facing its worst financial crisis since the August 1998 default as foreign capital is removed from the market in reaction to the conflict in Georgia, according to the Financial Times.  Analysts estimate that up to $2