In the grim progress of the credit crunch, this is crunch point. Last week’s falls of a fifth or more in markets from Japan to North America – the biggest for decades – were fuelled in part by governments’ failures to agree concerted plans to unblock the financial system’s plumbing. Further falls of similar magnitude this week would risk triggering a systemic meltdown.

So it is make or break time for policymakers to demonstrate whether they can restore confidence in the banking system. Finance ministers of the Group of Seven industrialised nations this weekend produced comforting words but no detailed action plans. Eurozone leaders on Sunday night managed to agree a framework plan to guarantee new bank debt issuance until the end of 2009 and allow member governments to recapitalise banks – if necessary by taking stakes as the UK is doing.