ABSTRACT
In Ireland, the largesse of the banks' lending to property both at home and abroad soon sideswiped the Irish economy as the drying up of liquidity threatened the viability of the entire banking sector. The Irish banks had turned away from the traditional route of funding loans from customer deposits. In Spain, regulation prevented the domestic banks from investing in US sub-prime loans, saving them from that contagion. While the general public acted fast to transfer its investments to protected savings banks, it was institutional investors and funds of funds that created havoc by removing huge chunks of cash immediately. Cash-rich and reinvigorated after a clearing out of their secondary buildings to international investors back home, the German open-ended funds were on the hunt again. The impact of Lehman's crash was immediate, a heart attack that sealed the fate of an already weakened market.
