The banks falling furthest in sympathy with Northern Rock hail from the UK, Spain and Ireland. These included nine of the European sector’s 10 worst performers on Monday. None admits to any difficulties and Spain’s central bank confirmed that no lender had asked for special funding. Still, these countries do share a common risk: inflated housing markets, which in turn have transformed banking systems, arguably for the worse.

As loans were written, largely to fund house purchases or property development, banks’ balance sheets expanded. Between 2002 and 2006 Spanish bank assets grew by 86 per cent and Irish by 120 per cent. The rise across the eurozone as a whole was just 41 per cent. The expansion of assets necessitated the shift to wholesale funding. In Spain and Ireland, respectively, only 63 per cent and 37 per cent of asset growth over the period was funded by deposit growth. Spain’s four mid-sized quoted banks and Ireland’s three big banks all have loan-to-deposit ratios above the European median, according to Citigroup. So do Bradford & Bingley and Alliance & Leicester, shares of which were savaged on Monday.