The World's Response: Credit Crunch

After the worst day ever for the Irish stock exchange, on Tuesday, Ireland guaranteed all the debt and deposits of all domestic banks for two years, citing "a serious disturbance in the economy caused by the recent turmoil in the international financial markets."

Also on Tuesday India's central bank took the rarely comforting step of declaring that one of the nation's largest banks ICICI, had sufficient "liquidity to cover liabilities to its depositors." Meanwhile, the governments of Iceland, Norway and Sweden all jumped in to bail out local banks.

Also this week: A Chinese insurance company reeled from losses on its stake in Fortis, a bank bailed out by the Belgian, Dutch and Luxembourg governments on Monday. On Tuesday, the Belgian government also came to the rescue of another big European bank, Dexia.

On Monday trading on Brazil's stock market had to be halted after stock prices plunged following the rejection of the bailout plan by the U.S. House of Representatives. On Tuesday, the Russian stock market also halted trading for two hours, and the government announced $50 billion worth of loans to Russian banks and corporations to help pay off foreign debts.

— Full Salon.com article