Who would have ever thought that the most sophisticated financial system in the world - that of the US - would trigger the most dramatic government rescue operation in history? Some may see this as a sad indication of the sharp and rapid deterioration in the standing of the country. More accurately, it speaks to how quickly the cruel realities of an unanticipated deleveraging process can alter the policy and institutional landscape.

As is now widely recognised, left to their own devices, US financial markets simply could not accommodate the large and simultaneous shrinkage of multiple balance sheets without major damage to institutions and, critically, the system. Last week, the damage had migrated to the essential component of any financial system - the smooth functioning of cash, collateral and counterparty risk management.