Banks are neither public fish nor private fowl. They have long relied on the support of public central banks. Since October, governments around the world have explicitly guaranteed the liabilities of big institutions. In the past fortnight, Alan Greenspan, the Ayn Rand-following former chairman of the Federal Reserve, has called for the banks to be taken into public ownership. The US government may take up to 36 per cent of the equity in Citigroup. But nationalisation is not essential.

The world cannot afford a repeat of Lehman Brothers’ implosion. Governments must, therefore, keep big banks going, standing behind them and making sure they can meet their obligations. This requires that big institutions are not allowed to fail or to have their debts restructured. The US Federal Deposits Insurance Corporation – which nationalises banks to re­organise their debts when they are insolvent – cannot now perform this procedure on big banks. Instead, they must be propped up.