We examine the international propagation of the financial crisis of 2008, and compare it with that of the crisis of 1931. We argue that the collateral squeeze in the United States, which became intense after the failure of Lehman Brothers created doubts about the stability of other financial companies, was an important propagator in 2008. We identify some common features in the propagation of the two crises, the most important being the flight to liquidity and safety. In both crises, deposit outflows were not the only important sources of liquidity pressure on banks: in 1931, the central European acceptances of the London merchant banks were a serious problem, as, in 2008, were the liquidity commitments that commercial banks had provided to shadow banks. And in both crises, the behavior of creditors towards debtors, and the valuation of assets by creditors, were very important. However, there was a very important difference between the two crises in the range and nature of assets that were regarded as liquid and safe. Central banks in 2008, with no gold standard constraint, could liquefy illiquid assets on a much greater scale. Understanding how financial crises are propagated from country to country is important because it can help in designing crisis-management policies to interrupt the positive feedback loops that are characteristic of such crises. In this paper, we examine the financial crisis of 2008 and consider how it was propagated from country to country, and compare it with the crisis of 1931. We choose these two particular crises because they were both global in scope; because they both affected the world’s principal financial centers, and because the crisis of 1931 had catastrophic consequences. Moreover, although the world economy is, at the time of writing, clearly recovering from the deep recession that followed the failure of Lehman Brothers in September 2008, it is still possible that there will be a relapse and that it will turn out that the crisis is not yet over.