A week ago, the global financial system was a minute away from a fatal heart attack. The defibrillators installed by governments and central banks – recapitalisations, liquidity operations and rate cuts – are working. Take Friday’s drop in the overnight cost of interbank lending. Sterling overnight rates fell by half a percentage point to 4.69 per cent, close to the Bank of England’s 4.50 per cent base rate. Dollar rates dropped 27 basis points to 1.67 per cent.

Further out, however, distrust is rife. Three-month rates have not budged, with money market funds fearful of redemptions hoarding cash. The spread of three-month sterling over expected central bank rates, for example, actually rose on Friday by 5bps to 209. Until it starts falling, the system will stay in intensive care. But the sucker, as President George W. Bush calls it, has not gone down.