It’s hard to argue, you might think, that banks have more to do to knock balance sheets back into shape. Yet recent tidying up efforts raise a question or two as to how far balance sheets are really being de-risked. This applies particularly to the banks’ sale of assets to private equity, of which Royal Bank of Scotland’s reported disposal of $8bn of loans outstanding to private equity firms is the latest example.

Private equity gobbling up its own debt seems a mite incestuous, as does many banks’ practice of lending a large proportion of the finance for the purchase of their assets at a discount to book value. In effect, the banks are using vendor financing to facilitate disposals in illiquid markets.