This comes from the Tax Justice Network blog this morning:

Sometimes, a picture speaks more clearly than words can. Now, courtesy of something that FT Alphaville has just pointed out, we bring you this (click to enlarge):

Look at all those jurisdictions inside the black circle. The accompanying text in the relevant IMF report, from where this graph comes, says:

"An illustration of Greece‘s interconnections in cross-border funding flows reveals why funding strains in Greece in the first half of 2010, despite being by itself small, might have translated into pressures on other Euro Area peripherals. Recall that banking exposures to Greece were relatively small in the context of banks‘ balance sheets; yet, concerns about the strength of balance sheets and the ability of other Euro Area peripheral countries with fiscal and financial vulnerabilities to finance themselves increased as the Greek situation worsened. Using the funds‘ data, Figure 10 presents four clusters (i.e., countries that together form more of a closed system), centered around a set of core connections that are closely linked to Greece: (i) a red cluster of countries with access to funds domiciled in Luxembourg; (ii) a black cluster with access to funds domiciled in the offshore centers of British Virgin Islands, Jersey, Cayman, Guernsey, and the Isle of Man; (iii) a blue cluster with Ireland at the core; and (iv) a green cluster of the U.S. with several key European and other countries. Greece is interconnected with each of the central nodes of these clusters. This close interconnection across other core countries suggests why asset re- allocations and flows might have been large systemically, with potentially significant impact on countries such as Ireland."

Contagion: it was the tax havens wot dunnit. (And you can be sure that the "United States" will have heavily featured Delaware, a tax haven inside the U.S. that has been the securitisation jurisdiction of choice; the "United Kingdom" means the City of London, that state within a state that is arguably the world's most important offshore jurisdiction.) We haven't yet fully digested the contents of this report. We will get back to you before too long.