Credit crunch hits the UK and Germany

With troubles at HBOS and Barclays hitting the headlines - plus suspicions that many others are struggling - credit markets are seizing up. Meanwhile, in Germany, the situation is even more critical.

The credit crunch has "inched closer to the heart of the British financial system", said Patrick Hosking in The Times. Banking group HBOS has announced that it would extend credit to a $37bn (£19bn) in-house fund that is struggling to finance itself.

What's worrying investors here?

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