By going through an open examination of its financial system, the US Treasury gave reassurance to investors about the solvency of America’s banks. Basking in the glow of their clean bills of health from these stress tests, some bruised financial institutions have managed to attract large amounts of private investment. As the International Monetary Fund has argued, Europe should follow the US lead; the continent’s sickly financial system needs a public check-up.

Europe’s banks are recession-ravaged. The IMF believes that, excluding the UK, European banks have $875bn of writedowns to come in the next two years. The equivalent figure for the US is $500bn. What is more, the economic damage of a weak banking sector is more serious in Europe than in the US; bank lending is a more important source of credit than it is in America.