Countries face spike in borrowing costs, warns OECD

Governments face a dangerous spike in borrowing costs in the coming years because rates charged are being kept artificially low while crisis measures are in place, the Organisation for Economic Co-operation and Development (OECD) has warned.

Is the global economy facing a global banking crisis?

So it's official. The French-Belgian specialty bank Dexia is the first financial institution to fall victim to Europe's debt crisis. In a deal hammered out by the governments of France, Belgium and Luxembourg, Dexia will be dismantled, with the Belgian government nationalizing the local operations of the bank.

Taxpayers are also on the hook for $120 billion in credit guarantees. I can't imagine that Dexia will be the only bank in Europe to meet this fate as the euro crisis continues to boil. Banks across the region hold festering compost heaps of rotting sovereign debt, spoiling the strength of their balance sheets. Some have holdings bigger than their capital. Greek banks are so exposed to their faltering government that I can't see how they dodge a bailout. French banks have been under pressure as financing has dried up. And with talk of a do-over for the proposed second bailout of Greece, as that nation's financial position continues to deteriorate, banks across Europe could be facing larger losses on their holdings of Greece's sovereign bonds.