WORLD'S BEST BANKS

At a time when the world economic outlook is more uncertain than it has been in years, the banking industry finds itself at the vortex of a financial market storm that originated in subprime mortgages in the United States and has spread to global money, debt and equity markets. "Unlike periods of financial turbulence I have witnessed over many years, this turbulence wasn't precipitated by problems in the real economy," says US Treasury secretary Henry Paulson. "This came about as a result of some bad lending policies."

In a press conference following a meeting in Washington, DC, last month with chief executives from several leading mortgage lenders, Paulson said the financial turbulence was all happening against the backdrop of a strong economy.

How consumers react to the housing meltdown, however, could be the key to whether the US economy can skate around the edges of recession. Meanwhile, the seizing up of the money markets this summer prompted central banks to pump out billions of dollars on an almost daily basis to try to restore normalcy.