Evidence is presented of the extent to which libraries from around the world are experiencing financial hardship as a result of the world-wide economic downturn. Comparative analyses are provides on the grounds of country, sector and size of institution. The article concentrates on the situation of UK and US university libraries and is based on the findings of two research projects: (1) a global questionnaire survey to which more than 800 institutions responded; (2) a focus group study involving 16 UK university librarians. (Contains 2 tables and 6 figures.)