As Carmen Reinhart and Kenneth Rogoff tell it in their masterly book This Time is Different, there is no secure way of short circuiting a deep banking crisis. The crisis originates with excessive debt accumulation, which makes economies vulnerable to crises of confidence.

The United States Federal Reserve, which helped create the problems through a combination of excessive liquidity and lax regulation, is trying to make amends by flooding the economy with liquidity, a move that, at best, has merely prevented matters from being worse. It s not surprising that those who helped create the problems and didn t see the disaster coming have not done a masterly job in dealing with it.