The events of the past weeks and days have dominated headlines and are threatening the world economy. Like so many dominoes, share prices and banks, big and small, have fallen in the United States and Europe, wiping out massive amounts of capital — about $21 trillion as of the end of September.

At first, the European banks looked as if they would escape the downturn. But as the crisis worsened, the piecemeal, country-by-country approach to dealing with the problem became more and more inadequate. Even countries like Iceland, which had virtually no exposure to subprime loans, found themselves teetering on the brink of absolute bankruptcy.

Many other financial institutions in Europe were being nationalized or facing the possibility of insolvency when this article went to print, and the G7 was hashing out measures at an emergency meeting in Washington to fix the crisis.