Governments may hold ordinary shares, but they will never be ordinary shareholders. Public recapitalisation is a vital part of the solution to the banking crisis, but the two-tier, part-nationalised banking system it creates carries its own problems – and may be a lasting legacy. The Swedish government has yet to sell off all the stakes it took following its 1992 banking crisis.

Some problems of public ownership seem insurmountable. Governments must insist that they will recover their investments – and help must initially be offered on terms that make it preferable to seek private sector support. Expensive preference shares and restrictions on dividends are prudent steps to protect taxpayers, but make it difficult for part-nationalised banks to attract new private investment.