Few have wanted to talk about it, but it is one of the chief consequences of decade-long Federal Reserve policy mistakes as mediated through the world's reserve currency, the dollar:
When the financial system collapsed in 2008, the eurodollar market was its epicenter. Banks in Germany and Holland failed because of overpriced real estate in Florida and California, yet hardly anyone questions the link between these incongruent geographical realities. For the most part, there was no housing bubble in Bavaria or Amsterdam, yet long established banking concerns were stricken, and then failed by one a world away.
For the most part, bank risk managers will prudently match their asset structure to their liability structure to the best of their abilities. In addition to managing overall durations and interest rate spreads, this also means a sensible policy of matching asset and liability denominations. So large funding exposures denominated in dollars leads to pointed acquisitions of dollar-denominated credit assets.
. . . [T]his explains the global spread of a dollar-based credit bubble . . .
Jeffrey Snider goes on to explain, here, how once stalwart Switzerland has become our latest victim.
