The party is over

These were the words of Nancy Pelosi, the Democratic house speaker, when she gave her speech on why Congress would reject the bailout plan to save American banks. At the time of writing, there is still uncertainty regarding whether or not the revised rescue plan will be passed or not. Regardless of the outcome, it seems the world economy went straight from the party into a hammering hangover. Until late September the Nordic region had seemed fairly well insulated from the banking crisis, with a few exceptions such as Roskilde Bank in Denmark. But in the space of a few days Glitnir went bankrupt, Swedbank started trembling, and an increasing number of Nordic banks were downgraded by the ratings agencies. As a result banks have tightened their belts on lending and increased interest rates. Subsequently, this month has seen some deals reporting an equity/debt ratio of 50/50 as opposed to the extremes of 20/80 and even 10/90 seen this time last year, even as the rest of Europe had already begun to feel the squeeze