Credit Crunch: First Anniversary

When Britain had a secondary banking crisis in the 1970s the big banks launched a lifeboat to rescue the sinking smaller lenders. Today we have a primary banking crisis. It is the big banks that are in trouble — but this time there are no bigger brethren, at home or abroad, to launch the lifeboats.

Barclays, HBOS and Royal Bank of Scotland have had to raise £20 billion of new capital to fill the holes left by bad lending. That is enough cash to buy one of their high-street rivals — though expansion is the last thing on their minds. Northern Rock, Alliance & Leicester and Bradford & Bingley are no longer in the FTSE 100, of which they were all members until they were mangled by the credit crunch. These casualties are not the secondary banks of yesteryear, the long-forgotten Cedar Holdings and Keyser Ullmanns, but Britain’s primary household-name banks.