But some countries have been surprised to learn that their own banks are heavily involved in bank to bank loans involving US companies affected by the subprime mortgage business, and their citizens are waking up to what a global economy can mean in bad times as well as good.



In Europe, the tax havens of Monaco and Andorra are regarded as safe havens - or as safe as can be in today's global economy - and both countries have seen an inward flow of funds over the last year, not only from other European countries but from the Middle East and the US too.

But now even the banks in Andorra are tightening up on who they lend money to, and cutting the amount they lend to property buyers looking for a mortgage.

Previously the banks were lending up to 80 per cent of a property's value, but recently this has been cut to 70 per cent. In addition the previous ease of getting a mortgage with few checks for assets has been replaced with more documentation required.

'The new tougher controls on credit being seen by the Andorra banks might impact the property market a little as we are about to enter the ski season, and some people on ski holiday end up buying an apartment, many taking advantage of easy to get loans.' commented one Andorra property company recently.

Commenting on the year so far for property sales in Andorras, the company has reported the year overall looked gloomy for estate agents in Andorra for the year overall given poor sales for January, February and March. But the second quarter proved to be dramatically better.

Rather than the ski apartment selling season being delayed, what saved the second quarter was high net worth individuals looking for residency and taking advantage of Andorra's tax haven status that has reignited the property market.

Buyers from the UK in particular were out in force during April, May and June - and again in the autumn from October - with many spending twice as much as the average ski apartment buyer.

The property buyers tend to head for different areas of Andorra, with the ski apartment buyers tending to purchase in the key ski resorts of Soldeu and Arinsal.

Those looking for residency for tax reasons go more for the year round villages and towns which have a resident community.

Outside of the capital (la Vella) these tend to be La Massana and the upcoming village of Anyos, Ordino and Arinsal, although Arinsal's nightlife during the ski season early December to late April tends to steer many newcomers to La Massana and Ordino.

It's early days in the global slowdown of easy credit and fast loans, and while London and New York are the main players in the banking game, countries as small as Andorra will be trying to avoid any major impact on their domestic banking systems and real estate markets, although in the medium and long term that might prove just impossible.