The banking crisis may be over, but the credit crunch is only just beginning – for consumers, companies, even countries. Pakistan is one example; emerging Europe another. From the Baltic to the Black Sea, the region has been one of the main beneficiaries of yesteryear’s cheap money. Now it may be one of the biggest losers. Iceland and Hungary are seeking help from the International Monetary Fund. They are unlikely to be the last.

The region faces an old-fashioned emerging market problem, with a modern twist. According to the Bank for International Settlements, it has been the largest recipient of cross-border bank loans, which reached $1,000bn last year. These inflows – in part supplied by subsidiaries of western banks, such as Italy’s UniCredit, Austria’s Erste Bank and Sweden’s Swedbank – supported huge current account deficits, expanded domestic credit supply and fuelled asset bubbles, especially in property. In Kiev, for example, prime office property rents are at London levels. Much of the lending has been in hard currency. Last year, almost half of all Polish and Hungarian mortgages were in foreign currency, and three quarters of Croatian.