This paper reviews the main developments leading to the actual financial and debt crisis. It starts with the expansionary monetary policy experiment in the US in 2002, which led to a bubble in stock markets and real estate markets. When the bubble burst, the latter provoked the subprime crisis. Banks holding subprime assets made substantial losses. Especially investment banks relying on refinancing in the capital market got in trouble. When Lehman Brothers failed the interbank markets collapsed and it was only due to the collective action of central banks and government that the financial system could be stabilized. The government involvement raised the public debt in many countries to unsustainable heights transforming the financial crisis into a public debt crisis. In Europe the weaker Euro member countries, burdened with both high public debt and high foreign debt, experienced steeply rising risk premia. In order to avoid a default of a member country as well as a default of their own banks, the stronger Euro countries made available guaranties, which will, in the longer run, diminish their own credit rating. The paper concludes with the skeptical note, that both the banking crisis and the public debt debt crisis may be with us for a long time to come.