The financial mire is affecting everyone, so here are answers to some fundamental questions, write Norma Cohen and Vanessa Houlder

Q: What is going on out there? Every time I turn on the radio, I hear that the stock market is crashing and the government is announcing yet another plan to save British banking. A: Britain, the US and Europe - including tiny Iceland - are in the grip of a full-blown financial crisis. Banks no longer have enough money to lend, so it has become difficult for you and me to borrow money.