Three months ago Central Banking warned that, in spite of some cautiously optimistic comments from central bankers and signs that tensions in short-term funding markets were dissipating, the credit crunch was still far from over. Since then the threat to the global financial system has increased, along with the twin dangers of accelerating inflation and looming recession.

We now mark the one-year anniversary of the credit crisis in sombre mood. Not only have global stock markets slumped, but