This article about Merrill Lynch I read yesterday explains it best in my opinion:
How the Thundering Herd Faltered and Fell
The reason it’s global is because a lot of foreign banks became big players in CDOs and had to pocket huge write offs. Phase two was when trust between banks eroded and they started to hoard cash and interest rates for interbank lending went through the roof. This second phase and problems with banks refinancing themselves led to the collapse of some European banks.