But hold on. Banks have at all times to comply with regulations, including regulations on their capital positions. Meanwhile auditors have to pass judgment and produce accounts — every six months for British banks and every three months for their American counterparts — on banks' asset quality and capital adequacy. Many top regulators and auditors have spent most of their working lifetimes looking at banks' books. The truth is that in 2006 and 2007 these professionals had not raised doubts about the solvency of any of the major British banking groups. They may have been wrong, but they had far more experience and a much deeper understanding of the subject than Gordon Brown. 

Like love, corporate solvency is a many-splendoured thing. Countless businesses have operated for years on end with negative cash flow and net assets, because their stakeholders believe that in due course their operations will generate significantly positive cash flows and make the investment worthwhile. A large number of early-stage pharmaceutical companies and high-tech computer start-ups have become successes only after repeated injections of cash.  

At the worst point in every financial crisis, a high proportion of banks are likely to have inadequate capital relative to regulatory norms or even to be insolvent, in the sense that assets if suddenly liquidated would be worth less than non-equity liabilities. This is just life. There is little doubt, for example, that National Westminster was "bust" in strict accountancy terms in the crisis of 1974. A recognised purpose of central banks is to lend to cash-strapped commercial banks, to give them time to resolve their problems. Over a few years, banks' operating profits — the principal source of positive cash flows — will come through and may outweigh losses on bad assets. Moreover, assets that were "bad" in 1974 might have recovered their original value in 1977 or 1980 because of a cyclical upturn in house and property values. 

Yes, National Westminster was bust in late 1974 if the assets had to be liquidated in a fire-sale. But over the next 30 years it did generate positive cash flows and paid a massive stream of dividends to shareholders. Measured properly from the standpoint of 1974, the value of that stream of dividends was far in excess of National Westminster's then capital as it appeared on the balance sheet. In jargon, the economic value of a business can be above its book value and a multiple of its fire-sale value. Indeed, there is nothing unusual in banks and other businesses having undoubted economic value, and enjoying immense market capitalizations on the stock exchange, although they could not pay back all their creditors if these creditors demanded immediate payment of their debts. Every accountant — and indeed every serious businessman — recognises the difference between the value of a company as a going concern and on a fire-sale liquidation basis. 

Brown claims that in late 2008 the banks were bust or, in other words, that the problem was one of insolvency; the bankers claim that in late 2008 their institutions had good assets and sufficient capital, and that the problem was one of illiquidity. Can Brown's statements in Beyond the Crash be proved beyond contradiction? When — if ever — will we know whether Brown or the bankers were indeed correct?