A week ago, the Ukraine was being briefly talked about.
But late last week, Dubai hit the headlines and triggered a bout of risk aversion.
Dubai World, a Dubai Government-sponsored investment vehicle, and its development subsidiary Nakheel, asked to restructure $US60 billion ($NZ83.3 billion), delaying its debt obligations by six months.
Those debts were reportedly backed by $US99 billion in assets.
ASB chief economist Nick Tuffley said yesterday that as was the case during the depths of the financial crisis, the main issue boiled down to whether Dubai World would default on its debts.
Dubai is one of the seven emirates that make up the United Arab Emirates (UAE).
Its main industries are real estate, tourism and finance.
"This latter industry is very relevant to recent events.
Dubai desires to become a world financial centre.
Even though Dubai World's debts are not Government guaranteed, it seems unlikely the Dubai Government would allow default," Mr Tuffley said.
The UAE Government, as a whole, also seemed to have the means to prevent default, with large sovereign wealth funds making the UAE comfortably a net external creditor.
Abu Dhabi, the other large UAE member, was very oil rich.
The UAE central bank was also putting into place liquidity measures to help support the Emirates' banks, he said.
However, the developments could continue to cause jitters in markets over the next few weeks.
Holidays in the Middle East had meant that the full local impact was still uncertain.
Equity markets globally had rallied a long way this year and were pricing in a relatively rapid and trouble-free global recovery.
Events such as Dubai could get people to assess the merits of taking some risk off the table, Mr Tuffley said.
"Financial contagion within the region will be closely watched for."
But to put Dubai's $US60 billion problem into perspective, there were other regions to worry about, Mr Tuffley said.
Eastern Europe continued to face economic and financial stress.
The United States and United Kingdom Governments would issue huge amounts of debt in coming years, he said.
Often, the US Treasury auctioned off more debt in one week than Dubai's outstanding total.
Perhaps markets would be better off worrying about California, the world's eighth-largest economy, which faced a budget deficit of about $US21 billion.
The UAE yesterday pledged to stand behind foreign and domestic banks in the country, offering additional money, while extolling the strength of the Gulf nation's financial sector, AP reported.
World markets are bracing for the opening of major world markets today (NZ time) as they come to terms with the debt.
