Banks gather money and lend it out. Their ability to survive depends on the confidence of depositors. No financial institution could survive if all its depositors asked for their money at once. That is the risk facing Europe’s banks as the financial crisis that has engulfed Wall Street sweeps across the Atlantic. It is the reason why the Irish government, panicked by large-scale cash withdrawals on Monday, announced a blanket guarantee for two years on all deposits at six big banks and protection for other creditors including bondholders.

Ireland’s response is understandable. Faced with the possibility of the imminent collapse of one or more of its banks, what country would not do everything it could do to prevent it?