America's Woes Spread to Other Countries

The current financial crisis began in the United States when lax lending standards on certain home mortgages came were allowed. Foreclosure rates began increasing as of 2000 and financial companies began reporting huge losses.

Many other parts of the world funded America’s consumer spending boom by lending America money. Many banks and investment funds outside America are holding large amounts of American debt paper and are now very upset and unhappy with bank and financial institution assets that no longer have any value.

Leaders of the world's top countries, the Group of Eight, are scheduling a meeting to meet in the near future to discuss solutions for the financial crisis. The Group of Eight consists of the United States, Japan, Germany, France, Britain, Italy, Canada and Russia.

European financial and political leaders agreed to pump billions of euros into their banks to help with declining economy. To deal with their failing economy Iceland's central bank dropped interest rates by 3.5 percentage points. Greece has pledged up to 28 billion euros or $38.5 billion to help its banks through the current financial crisis. Germany is proposing a plan to provide 400 billion euros or $536.7 billion to their banks.