With confidence in the financial sector so low, it is perhaps inevitable that the world's big central banks had to step in and cut interest rates, and that the UK government intervened with more liquidity, guarantees on inter-bank lending, and the offer to recapitalize the banks by buying their shares. Most of the comment on this has been positive, but there are downsides too.

Let's remember that it is governments that got us into this problem – forcing lenders to make bad loans for social/political ends, printing money to keep the markets afloat through the dotcom crash and  9/11, and looking the other way while banks borrowed thirty times their assets. Are they really the best people to fix the problem?

The £100bn of extra liquidity that the Bank of England is pumping in, plus the interest rate cut, might indeed be enough to stop the hemorrhaging. Which is arguably fine, because the patient is critical. But it is no cure. It will produce a nasty inflation which, from past experience, will take still more time and pain to get rid of. And big government deficits, at a time when we need sound finances.

Nor is the immediate treatment exactly free. The government is going to charge the banks a fee for its guarantees. They're providing capital right enough, but it's expensive capital, which doesn't help the banks' profitability.

And now the government is becoming a big player in the banking business, owning a chunk of their shares. When can we expect this part-nationalization to end? If bank shares continue to perform poorly, it won't be able to sell; if the banks recover and their shares spring back, it won't want too.