How quickly in these difficult markets can smart, opportunistic deals turn into turkeys. Ken Lewis, the chairman and chief executive of Bank of America, was applauded in August when he injected $2 billion into Countrywide Financial, America’s biggest mortgage lender, in return for a 20 per cent stake. At the time it appeared shrewd. BoA instantly captured a meaty chunk of the American home loans market at a seemingly rock-bottom price.

Five months later the US housing market is in deeper trouble and Countrywide is having to deny bankruptcy rumours amid a collapse in the price of its shares, which were suspended at one point yesterday. BoA is for now facing a huge loss on the transaction. The parallels are inexact but the sovereign funds of Asia and the Gulf, which similarly injected rescue equity into four of the world’s biggest investment banks - also on apparently sweet terms - will be keeping their fingers crossed that this is not the start of a trend.

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