Morgan Stanley has issued a warning note saying that it has removed Bradford & Bingley from its banking portfolio, and advises people to avoid British banks:
"Our UK banks analysts suggest international investors should avoid UK banks at the moment, given the structural and systemic issues."
To add to the gloom, the Financial Services Authority (FSA) said that lending conditions could get worse and that lenders should forgo profits to protect themselves against a collapse in liquidity similar to the Northern Rock fiasco.
Against this background of depression and gloom, the Bank of England Monetary Policy Committee (MPC) meets to day to set interest rates. Analysts, whether more out of desperation than sound reasoning, are predicting a cut from its current level of 5.75%.
Whatever the Bank of England may do, it does not excuse the other banks from their responsibility for creating the credit crunch and liquidity crisis which they are all bleating about. They have the means to resolve this by simply having the guts and cajones to start lending to each other again.
Who amongst the bankers has the courage and leadership to do that?