When Merrill Lynch, the US bank, announced 10 days ago that it was taking $8bn-worth of losses on mortgage-related securities, bankers and regulators around the world reeled in shock. For the writedown was twice the size of the losses that Merrill had forecast just a two and a half weeks earlier – a “staggering” multi-billion dollar gap, as Standard and Poor’s, the US credit rating agency, observed.

But last week, investors received an even more staggering set of numbers. As financial analysts perused Merrill’s results, some came to the conclusion that the US bank could be forced to make $4bn more write-offs in the coming months.