WHAT’S the quickest way to kill a bank? As recent events in the financial world have shown, the answer is to deny them access to ready cash. Over the past year, a string of banking institutions have found themselves in such a “liquidity crisis”: unable to convince the market they can honour their promises to pay back money they owe. The result has been a series of high-profile failures, from Northern Rock in the UK last year to Lehman Brothers last week.
The crisis did not come without warning. Ten years ago this month, a giant hedge fund called Long-Term…
