One type of credit, residential mortgages, receives particular attention from headline writers. The monthly flow of new mortgage approvals slithered in the year after the run on Northern Rock from more than £30 billion to less than £15 billion. But another drop of over 30 per cent, the sharpest in percentage terms in the current cycle, occurred between October and November. In December and January, mortgage approvals were under £10 billion. The British public's mortgage debt is now falling in real terms.

Pace the FT, the bank recapitalisation programme last October has not rescued the world or even Britain. It has instead proved a total disaster. The correct policy would have been not to bully the banks, but to raise the growth rate of the quantity of money. That could have been done if the appropriate financial operations had been organised by the Treasury and the Bank. Fortunately, these operations - under the label "quantitative easing" - are now being carried out, and have already been welcomed by financial markets. Share prices are rising and bond yields falling. If quantitative easing, rather than bank recapitalisation, had been adopted in October 2008, much unnecessary misery could have been averted.