First Former Soviet Satellite Nation Falls..

In a sign of what may be the future for more than one former Eastern Block nation, Latvia has defaulted after a week of rumors surrounding highly leveraged European Banks and their ‘subprime’ borrowers- European emerging markets.

For more on the trouble with Eastern European nations and the potential calamity it spells for Austrian and other European Banking institutions see this recent Telegraph article, and Yves Smith’s commentary Will Eastern Europe Trigger a Financial Meltdown.

Also worth a read is this article from FT Alphaville, which looks at the claims of UBS bank (who’s analysts attempted to rebut the Telegraph piece) that fears over Eastern Europe are overblown, UBS: No Eastern European Meltdown.