Chart 2: Trade cycle of advanced economies and India: 1992 to 2009 0.25 0.2 0.15  IMPWORLDCY EXPINCY  0.1 0.05 0 -0.05 -0.1 -0.15 -0.2 -0.25  1992M01 1992M08 1993M03 1993M10 1994M05 1994M12 1995M07 1996M02 1996M09 1997M04 1997M11 1998M06 1999M01 1999M08 2000M03 2000M10 2001M05 2001M12 2002M07 2003M02 2003M09 2004M04 2004M11 2005M06 2006M01 2006M08 2007M03 2007M10 2008M05 2008M12  -0.3  13.
Several European countries face a vicious circle where weak domestic banks cause fiscal difficulties for governments, which in turn undermines public debt sustainability and further damages banks’ balance sheets. In the U.S., such a feedback loop does not exist, because federal institutions act as shock absorbers.