In recent years, the concept of a “Goldilocks” recovery has permeated the policymaking world. For after decades of painful economic booms and busts, politicians and central bankers have become wedded to the idea of chasing a growth rate that is neither “too hot, nor too cold, but just right” – as Goldilocks famously said, in reference to her porridge.

Now, however, it is time to apply the fairytale character to debt. For as the credit crunch rumbles on, the focus of many policymakers and investors is quietly moving beyond the simple issue of just how large impending credit losses might be.