Nobody’s safe until we know how toxic the bank monster is

In truth, of course, the toxic monster now raising its head has been there all along. It's just that in our somewhat naive, trusting state we thought it was being neutered. No. It has quietly been gathering strength, gorging on growing bad debts and a property slump.

Worse, those we thought were taking charge of it — government officials and the bankers who created the beast in the first place — seem to have been doing very little. Certainly, they appear to be in no position to give its all-important statistics.

The news that Bank of America was taking a colossal hit on Merrill Lynch was being greeted by some today as a failing on the part of BoA. The new owners should have done more in the way of due diligence, they said. What? They seem to forget that BoA was pushed into the takeover in the course of a few dramatic days in Washington.

A process that would normally have taken several months was squeezed into no time at all.

As ever, those actually responsible for spawning and feeding the gorgon seem to have no blame attached to them. Surely, it was the duty of the Merrill executives to come clean?

It's this continuing failure of bankers to shoulder the burden — and the seeming lack of ability on the part of the authorities to force them to do so — that is most worrying.

Until the banks purge themselves there is little hope of them being made to lend. The breakdown of trust between the banks, which prevents them extending credit to each other and their customers, is based on the knowledge they possess.

We seem to have returned to square one, to the effective nationalisations in America of BoA and Citigroup. In Ireland, Anglo-Irish is now under state control. Here, we're heading towards the establishment of a "bad bank", built of duff assets and funded by the taxpayer.

The banks behaved badly, we realise. Incredibly and shamefully, how badly, is a question we still cannot answer.