Assailed by the whiff of toxic debt

I turn on the radio to find that the government is launching a fund to sap up the toxic debts of the banks. Not just the banks we own, but others too.

Is it still beyond the realms of reason to ask whether some of these specific debts could not be unwound to find out how they were put together?

Let me put it this way. I offer you £100, which I know to be made up of one good £20 note and four notes that are complete rubbish. I sell you this £100 for a bargain £70.

In criminal law, my knowledge of the rubbish that is bound up in this notional £100 is known as the “mens rea”. My crime – the “actus reus” – is to sell the £100 to you.

The bankers, of course, would say in their defence that they thought what they sold had real value.

The Treasury announced last week that it is looking for 70 bankers to employ during this crisis. In the view of some, it should be looking for a considerably larger number – to prosecute.

Of course, six months into this crisis, not only do we still have no idea how big the toxic debt in the banks is. We have no idea of the real number of human beings who generated it.