“That we are in the midst of crisis is now well understood.” So said the freshly inaugurated US president Barack Obama on Tuesday, and nobody could possibly disagree with him.

But Tuesday’s sell-off shows that the crisis has not yet been priced in by the market. Most importantly, Europe’s bank sell- off spread to the US, where the S&P Financials index crashed 16.7 per cent, almost its worst ever, to a 14-year low.