Three times in the past six months, Hank Paulson says, he feared that the world financial system was in danger of complete meltdown.

The first time, the US Treasury secretary told the FT in an interview, was in August when he realised that Fannie Mae and Freddie Mac, the mortgage giants with $5,400bn (€3,825bn, £3,650bn) in outstanding liabilities held by investors round the world, were in very serious trouble.