IN THE RED

Bertram said the US banks' problem was on the assets side of their balance sheet (the quality of their loan books). New Zealand banks' problem, by contrast, is on the liabilities side - their reliance on imported credit for more than a third of their funding.

* New Zealand's large current account deficits have been funded by banks importing credit, which is now in short supply.

* This has helped keep the dollar high, hobbling exports and making it harder now to trade our way out of trouble.

* And now the banks have sought, and been given, a Government guarantee to help them roll over those offshore debts.