111711 euro stock crisis
A trader follows the speech by Greek Prime Minister George Papandreou on a television at the stock exchange in Frankfurt am Main, Germany, on November 3, 2011. - 

Jeremy Hobson: The credit rating agency Fitch says U.S. banks could be hit hard by the turmoil in Europe. The warning came late yesterday and sent bank shares tumbling.

For more, we're joined live by Marketplace's Amy Scott. Good morning.

Amy Scott: Good morning.

Hobson: So Amy, the U.S. has obviously had quite a bit of time to cut their exposure to Europe. What is Fitch saying here?

Scott: Fitch says U.S. banks have done a pretty good job of reducing that exposure -- at least, to the most troubled European countries like Greece and Ireland. But you know, worries about default have recently spread to Italy. And analysts are concerned the problems could reach into bigger countries like France and Germany, where U.S. banks have a lot more exposure.

Hobson: And as we've seen, this situation can change by the day. You were back in New York covering the problems at our banks in 2008 and the financial crisis. And in that case things spiraled out of control very quickly. Is that kind of situation possible here?

Scott: Right. Well, at this point it seems unlikely.

I spoke to Tim Leunig, an economic historian at the London School of Economics. He says it is possible though, if things do get a lot worse in Europe, credit could dry up here.

Tim Leunig: If American banks think that they're not going to get the money back that they've lent to German banks, they have to be a lot more careful lending to anyone else, including main street in the United States.

Right now Leunig thinks that's a distant possibility; that worries about Germany have been overstated. It is the economic powerhouse of Europe. And banks have had a lot of time since that financial crisis three years ago to get their books in order, to be prepared for this kind of shock.

Hobson: We will see how well they did. Marketplace's Amy Scott, thanks a lot.

Scott: You're welcome.

Follow Amy Scott at @amyreports