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As Spain's credit rating is downgraded a day after Standard & Poor's cut its ratings on Greek and Portuguese debt, how far could the eurozone's debt contagion spread?

In their recent book on the history of financial crises, Carmen Reinhart and Kenneth Rogoff note that banking crises are frequently succeeded by sovereign debt crises, as governments are forced to assume private liabilities to keep their national financial systems afloat. The 1997-98 Asian crisis provides a relatively recent example of how private debts can rapidly become public liabilities if a default threatens the overall economy.