Financial history, to rephrase Arnold Toynbee, feels at present like one damn thing after another. No sooner have the world’s central bankers and policymakers doused one fire than another springs up elsewhere. With the crisis now directly invading the real economy through the seizure in the US commercial paper market and with the market’s concerns extending to Royal Bank of Scotland, things look exceptionally nasty. So let me take up the ultimate quixotic challenge of trying to construct a case for optimism.

First, transatlantic interest rate cuts must now be imminent. Policymakers will be extraordinarily inept if they fail to dress them up in a co-ordinated move. In the midst of a credit contraction, this will do little to reflate economies but will help confidence and enhance the profitability, and thus the capital, of the banking system.