The credit squeeze is not yet over, to judge by the US government’s involvement in an effort to unfreeze the commercial paper market. The Treasury-backed plan involves the pooling of about $75bn of assets from banks’ off-balance sheet investment funds in the hope of soothing investors’ nerves.

This is the biggest US intervention since the Federal Reserve co-ordinated the bail-out of Long-Term Capital Management in 1998. Unlike the Northern Rock rescue, it does not involve any commitment of public funds but it still raises the question of whether the Treasury should have any role at all.