Up the Creek

Will Abu Dhabi Save Dubai?

Could Dubai have been just the first domino to fall? After the country defaulted on some debt, there is concern that sovereign-nation debt in places like Russia, Brazil, Mexico, and Turkey could feel an aftershock of the global financial crisis, according to The Wall Street Journal. Now, market watchers are looking to see whether or not the UAE’s oil-rich capital, Abu Dhabi, will bail out Dubai. An Abu Dhabi official tells Reuters that it will only help Dubai on a “case by case” basis—bad news for investors who had assumed Abu Dhabi would just offer blanket assistance. Dubai’s troubles also look like bad news for British banks: Royal Bank of Scotland was the biggest underwriter of loans to Dubai World, while HSBC is the most at risk in the UAE.