The credit crisis has turned the financial services world upside down. Investment banks have become commercial banks. Two huge commercial banks have been forcibly merged. Venerable institutions which trace their origins to the turn of the century and before have disappeared. The government is now the financier of last resort for literally billions of dollars of financial assets.

With prices declining sharply, one might think that leveraged debt was suffering from the same payment problems destabilising our other credit markets. However, unexpectedly, the underlying debt is proving remarkably resilient. The latest figures show a default rate of only 3.3 per cent. Most commentators expect that to increase somewhat in the months to come but still to be well below the 10 per cent rate from the credit meltdown of 2002.