European banks held a lot of US sub-prime debt.

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In addition to the regulatory actions against Goldman, the German government and insurance company AIG have both said they are considering bringing private legal cases over money they lost on sub-prime debt that the firm sold to them.

BBC: Goldman Sachs profits top $3bn

On July 17th, Moody's, a credit-rating agency, gave warning that it was considering downgrading South Africa's sovereign debt to sub-investment grade, a move that would deter much-needed foreign investment.

ECONOMIST: South Africa

It had warned earlier in the year that it was struggling as thousands of its sub-prime borrowers battled with debt.

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With debt high and growth sub-par, every country wants to export its way back to health.

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The polemical edge is unrelenting: deregulation of the financial markets was a disaster, and piling collateralized debt obligations and insurance swaps atop sub-prime mortgages was insane.

NEWYORKER: Inside Job

Prior to the subprime crisis, Goldman played a major role in persuading the large debt ratings agencies to upgrade a significant amount of sub-prime mortgages to prime, which were then packaged and sold them as prime.

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