Why Can't The Fed Save Turkey?

Turkey's currency crisis shows no signs of abating. The lira has lost 40 percent of its value relative to the U.S. dollar so far this year. That's making dollar-denominated debts throughout Turkey's economy much harder to pay off. And that threatens a potential financial crisis that could take down banks and markets well beyond Turkey. Fortunately, however, the world has dealt with problems like this before. The immediate aftermath of the 2008 financial crisis left many European banks in the same predicament that Turkey is in now — saddled with enormous commitments denominated in U.S.

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