Dexia, a Franco-Belgian bank, was the first one to be engulfed by the crisis. The immediate problem was the overdependence of Dexia on market borrowings to fund its assets. As confidence and liquidity in the interbank market dried up, Dexia found it difficult to raise money and a liquidity crisis quickly escalated into a solvency crisis. One would have expected European banks and banking regulators to have learnt from the experience of Northern Rock in Britain just four years earlier—but they obviously have not. Parts of Dexia are now being nationalized and the European Central Bank is providing huge short-term liquidity to the banking system. Nor has UBS been wiser after its losses in complex derivatives in 2008: it has recently reported another trading loss of $2.3 billion.