Overdrawn: bailing out Argentina's government will cost the banks--and the country, too.

Argentina's long, slow and ultimately predictable decline has nonetheless produced a serious shockwave for its foreign-dominated banking sector. Devaluation overnight chopped assets of US$141 billion in half. Another $30 billion in bad public-sector bonds means many banks might have to pack up and leave Argentina for good.

Big banks that lent heavily to the government, including HSBC and BankBoston, are likely to leave first, analysts say. HSBC said publicly it might go following a $1.1 billion charge on its Argentine holding company. Less inclined to bail are Spanish-o