Again, the vast majority of these exposures were private-sector exposures—property lending in Spain, and the like. The sovereign component of these figures was comparatively small. But what mattered was how levered these banks were and how important those sovereign bonds were for funding these banks. Once these bonds lost value, European banks increasingly found themselves shut out of US wholesale funding markets at the same time that US money markets began dumping their short-term debt. What happened in the United States in 2008, a general “liquidity crunch,” gathered pace in Europe in 2010 and 2011. It was only averted by the LTROs of the ECB in late 2011 and early 2012.

Mark Blyth, Austerity, loc. 240