HBOS's annual report for 2006 covers almost 200 pages. But the document does not carry a single reference to Grampian Funding, the vehicle the bank uses to help lower its financing costs. So investors could be forgiven for expressing some surprise on Tuesday when HBOS announced that it would take direct responsibility for financing Grampian.

Grampian, which has assets of about $37bn, is one of Europe's largest bank conduits. These are funding vehicles usually kept off a bank's balance sheets that have emerged as pivotal players in the current market turmoil. HBOS, the UK's fourth-largest bank, is the largest financial institution so far to publicly admit the effects of the drought in the market for asset-backed commercial paper, which conduits such as Grampian rely on for funding. But other banks are suffering as well.