The names of those European banks that needed financial rescues in the last two weeks may not be familiar to many Rhode Islanders.

But they are important to understanding the slowdown under way in the global economy that is affecting the ability of the United States to weather its own banking crisis. The crisis in confidence in the banking systems on both sides of the ocean could deepen a recession worldwide.

That's because the markets, especially in Europe and the United States, have become interconnected. Goods and services have to be exchanged for it to work.

For that market to function, capital must flow freely to finance trade, expansion and the daily grind of commerce that creates jobs and wealth. When banks in the United States and Europe -- weighed down by soured assets from bad investments -- stop lending to each other and to credit-worthy borrowers, the whole system can freeze, strangling the economy.

That's the danger now.

If the names of the above-mentioned European banks don't mean much to Rhode Islanders, here's another one that may hit closer to home -- the Royal Bank of Scotland.

The Royal Bank, based in Edinburgh, acquired Providence-based Citizens Financial Group in 1988. Citizens runs what has expanded into one of the 10 biggest banks in the United States, with branches on seemingly every corner in Rhode Island.

The Royal Bank has already done a sizable write-down of bad assets and completed a round of raising fresh capital. The huge, international company also has laid off 7,200 of its 170,000 employees worldwide and is continuing other cost-control programs.

No one is suggesting that the Royal Bank is in danger of failing or needs a rescue.

But with so many unsettled questions about the continuing economic slowdown that causes deterioration of assets, it's hard to tell how much work the Royal Bank will still have to do.

Some analysts in London have told investors that the Royal Bank, the second-biggest bank in the United Kingdom, will need to raise fresh capital and continue to write down troubled assets.

By one estimate from Panmure Gordon & Co., the Royal Bank may need to raise billions of dollars in capital, its cushion on the balance sheet to protect against losses. Other banks have had trouble raising capital in the public markets.

A spokesman for the Royal Bank declined comment.

While its headquarters is overseas, the Royal Bank may get some help in unloading troubled assets from the U.S. Treasury.