That is a sign that E.C.B. measures have not yet succeeded in restoring the flow of credit to troubled countries like Spain.

But the E.C.B.’s efforts have been thwarted by continued reluctance by banks, many of which are already burdened by bad loans and are trying to reduce risk. In some countries there may also be a lack of demand for loans, because corporate managers are not confident enough to resume investing in their businesses.

No region of the world has benefited more from cross-border banking, yet these achievements are now at risk

The threat to cross-border banks comes not only from their deteriorating balance sheets in the face of lower sovereign-debt quality and weaker growth prospects, but also from the policy response itself.

a European solution must take account of the network of foreign subsidiaries across Europe.

Expansion was, for lack of other options, financed largely through short-term loans.

since the onset of the global financial crisis, eurozone-based banks’ subsidiaries in emerging Europe have been reducing their exposure to the region. In 2009-2010, the European Bank Coordination Initiative – known informally as the “Vienna Initiative” – helped to avert a systemic crisis in developing Europe by stopping foreign-owned parent banks from staging a catastrophic stampede to the exits.CommentsView/Create comment on this paragraphBut, in the second half of 2011, the eurozone-based parent banks that dominate emerging Europe’s banking sector came under renewed pressure to deleverage. Many are now radically changing their business models to reduce risk.