Understanding Euro Crisis Jargon

Contagion (n)

When financial panic becomes contagious. When investors in Spain see what’s happening in Greece and decide to sell like there is no tomorrow. When a financial problem in a little-known company on one side of the world causes the collapse of a hedge fund, which in turn leaves a dent in a bank’s balance sheet, which in turn makes it that much more difficult to borrow from your local bank manager.