[danielf]

Originally Posted by Derek S

Arf!

Shouldn't laugh though. I'd imagine a lot of banks have debts tied up in Dubai and if it all goes to hell theyll be looking for another bailout.

Actually, Dubai is nearly bankrupt, and it's already affecting European stocks.

http://business.timesonline.co.uk/to...cle6933664.ece

(today's times)

The value of British banking shares plunged by £13.7 billion today amid growing fears the UK financial sector could be heavily exposed to Dubai World, the state-owned conglomerate which yesterday asked for a standstill on its $60 billion (£36 billion) debt pile.

Investors had been hoping the British financial sector had worked through much its toxic debt, which included exposure to America's sub-prime mortgage market.

However, Credit Suisse estimates European banks are exposed to about half of Dubai's $80 billion borrowings, naming Barclays and Royal Bank of Scotland (RBS) as the UK lenders most at risk from the Emirates worsening debt problems.

The emergence of Dubai's financial problems now raises fears UK banks could face more writedowns on bad debts, and chimes with warnings earlier this week from Dominique Strauss-Kahn, the managing general of the International Monetary Fund, who said that global banks had only worked through half their toxic assets since the banking crisis broke two years ago..