America's can-do attitude to the banking crisis left UK policymakers looking a bit flat-footed once again yesterday. While Hank Paulson was unveiling plans for an $800 billion plan to support securities backed by credit card loans and car loans, as well as mortgages, British officials were only just starting to apply for the green light from Brussels for their own £100 billion scheme for mortgage-backed securities.

Even now, the Chancellor has stepped back from making a final decision on the Crosby proposal. And serious disagreement remains over whether it is a good idea, with the Bank of England dead against, arguing that subsidising mortgage lending in this way might crowd out lending to small companies.

There is also, rightly, some suspicion about a policy that will help to prop up house prices just as they start to come within reach of first-time buyers again.

The impatience with British banks is intensifying, however. Mervyn King, the Bank's Governor, reckons that getting them to start lending again is the most important policy objective of all, even declining to rule out the threat of full nationalisation as a method of getting the banks to yield.

That may prove necessary, whether they lend or not. The deadline for applications for Royal Bank of Scotland's £15 billion rights issue passed yesterday. Since the prevailing share price is 18 per cent lower than the rights price, it seems highly unlikely anyone apart from the directors - who promised to subscribe - will be putting their hands in their pockets.

So HMG is almost certainly about to fork out £15 billion and take possession of a majority stake in the bank. As the recession triggers more defaults, banks' capital cushions will be whittled away. The collapse in commercial property values may be the next source of serious embarrassment. The Government may have to inject more capital, anyway.

Some bankers believe that the criticism about lending is unfair and overdone. In a letter to The Times today, Eric Daniels, the chief executive of Lloyds TSB, insists that his bank is continuing to extend loans to both small business clients and mortgage borrowers.

It suits ministers and central bankers to find a scapegoat for the intensifying economic hardship - and who better than the people responsible for triggering it all in the first place? As one senior banker ruefully put it yesterday, the baiting of usurors has been a popular pastime since the Middle Ages.

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