Stunning cost of a dramatic guarantee

Hank Paulson's stalled $700 billion (£385 billion) plan to rid American banks of toxic debts is set to cost every man, woman and child in the States just over $2000 each.

Even after this week's nationalisation of Bradford & Bingley, the great British public's exposure to our Government's guarantees there and at Northern Rock amount to a little less than £2500 a head.

Ireland is guaranteeing something in the order of 400 billion (£318 billion) of deposits, loans, bonds and senior and subordinated debts. That works out at a staggering 97,560 per person.

Or, it is nearly nine times Ireland's national debt of 45 billion, more than seven times the entire market value of the Irish stock market at 55 billion, and more than twice the country's gross domestic product of 190 billion.

What is more, today's move was made unilaterally, is planned to last for two years and covers not just existing but new deposits.

The immediate surge in the Irish banks' and insurers' share prices suggests that all must now be well.

But the Celtic tiger is now an also-ran in eurozone economic terms.

On reflection, investors will soon be asking themselves quite how bad it must have been for the government to be forced into taking such dramatic measures.