Take a bank that replaced long-term debt with equity in order to raise its ratio of equity to risk-adjusted assets from 10% to 15%.

The IMF reckons that Portugal's net international debt (what residents owe to foreigners, less the foreign assets they own) was 96% of GDP in 2008, an even higher ratio than Greece's (see chart 3).

Corporations seem to be improving slowly, as reflected in the sharp increase in the ratio of broad liquid assets to short-term debt.