The man who owned The Talk of the Town restaurant yesterday became conversation topic of the City.

Joe Lewis bought a 7 per cent stake in Bear Stearns, the investment bank which has lost just over a third of its value after the closure of two of its hedge funds. Mr Lewis is best known in the UK for his stake in Tottenham Hotspur. But the investment by the former restaurateur crystallises the question that is on the minds of bankers everywhere: is it time to start buying? There are clearly investors out there who believe that the anxiety is overdone and that, as a result, assets are undervalued.

Lehman Brothers has been busy in recent days putting together a $3 billion distressed debt fund. Goldman Sachs has been working on something similar. Just as the boom underestimated risk in the credit markets, the current crisis seems to overestimate risk. It is, no doubt, a good time for bargain hunters.

Mr Lewis will not be the last to make an opportunistic move. The banking sector, in particular, is dotted with investment opportunities.

In the UK, one of the big questions is what will happen to Northern Rock, the mortgage provider that has plummeted in value. It would provide a handsome addition to the Lloyds TSB mortgage business; then again, it would sit well with Barclays too.

The problem is that it is unclear to almost everyone — central bankers, commercial bankers, let alone retail investors — whether or not the credit crisis has played out. While the uncertainty continues, an investment that one day looks like a smart predatory move can seem like a reckless attempt to catch a falling knife the next.

Investors yesterday were unconvinced by Mr Lewis. To be sure, he did not explain his investment. The billionaire who has made his fortune in the currency markets no doubt expected that his show of confidence in Bear would speak for itself.

It didn’t — the stock was up by just 1 per cent.

The reason for the collective shrug was that investors in Bear Stearns had been hoping that the weakness at the bank would prompt a strategic move by a financial institution with a big balance sheet.

In short, they were looking for the likes of a Chinese commercial bank to come and prop it up.

This, in itself, reveals what is potentially the most interesting and, as yet, unexplored element of the markets crisis of 2007 — namely, the new role accorded to China as potential purchaser of last resort.

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