Almost two years into the credit crisis, the markets for securitised loans are still frozen. That does not mean the “rocket scientists” who made ultra-complex instruments have found nothing to do. Indeed, regulators will need to be very careful to make sure that some of their latest innovations are not rather dangerous.

Barclays Capital is pushing “smart securitisation” – spinning old legacy assets into securities that can be rated by agencies. Meanwhile, Goldman Sachs is devising insurance contracts against legacy assets – a private alternative to the asset protection schemes being used by governments around the world to stabilise bank balance sheets.