August 7, 2007 (LPAC)--Belying the "reassuring" statements by US Treasury Secretary Henry Paulson, that the U.S. mortgage-related credit crisis is "contained," comes news that it is indeed spreading...

In Germany, according to the "Finanznachrichten" financial newswire, Frankfurt Trust is freezing its ABS-Plus fund. This is the fourth ABS (asset-backed security) fund to be frozen in Germany, within one week after the breakout of the IKB crisis,--which crisis itself was directly related to the U.S. sub-prime mortgage blowout. The freezing of a fund, meaning that investors can no longer withdraw their money, is usually seen as the last desperate step by managers before liquidation...

In Switzerland, as reported by the Neue Zuercher Zeitung today, losses for Swiss funds were already 20 percent in June, a figure expected to increase in July. A report published by Italy's Mediobanca says that eight billion euros were pulled out of investment funds in that country, in the month of July alone...

And in China. In addition, AFP reports that the Bank of China said that it is facing losses of "several million dollars" due to the U.S. sub-prime crisis, according to comments of vice president Zhu Min at a conference in Shanghai yesterday. The Bank of China has invested billions of dollars in U.S. dollars in mortgage-backed securities, but is so far claiming that the losses have had relatively little impact. According to the U.S. Treasury, China was the largest investor for U.S. mortgage-backed securities in the last 12 months. Asia as a region had invested $226 billion in U.S. mortgage-backed securities as of June 2006.