Well, I think it does depend on what you mean by 'recovery'. Certainly it's telling us something. I think since Lehman's went under, probably right up until middle of February, the global economy was getting worse at an incredible pace. It was almost as if the world economy just dropped off the edge of a cliff. And that has changed. And the dataflow that we're seeing now with a few more optimistic signs are a pointer of that, that we've passed the point where things are getting worse at an accelerating rate, which clearly couldn't continue. The global economy would effectively cease to exist. And we're now starting to bottom out. Things are still getting worse, but at a much more gradual pace. And if this continues, which we expect, sometime towards the middle or the end of this year you'll reach a bottom and then we have to look to the recovery. And I guess the question is what's the recovery going to look like? Unfortunately, all this slightly more positive data now doesn't really give us a lot of information about what the recovery might look like, or even when we're going to reach the bottom, but it does mean that we're not falling quite as quickly as we were a couple of months ago.

That's right. In fact, if you look around the world, and I'm sure to many commentators this seems extremely unfair, that countries which actually saved a lot, such as Germany and Japan who, you might have expected, given the nature of this crisis, a banking crisis driven by over leverage, too much borrowing, you might have thought that those markets would do very well. But actually what we see is that countries like that are doing extremely badly. And, as you say, we've revised down Germany and that economy's going to contract at 5 to 6 per cent this year. And actually Japan's going to contract at a similar kind of pace. And really that's because their export markets have completely collapsed. Of course the UK is one. America is another one. And as a result of that they see their whole export industry, which is very large, start to shrink and then that knocks through into their domestic economy and they actually end up suffering even more than places like the US and the UK where perhaps the crisis had its roots and the borrowing was most excessive. So it may seem very unfair, but that's the way this downturn's playing out.

Their view on the economy is that they don't want to take rates all the way to zero in the way that you've seen other central banks do. They are actually being very, very active in other ways. So you are seeing them inject a lot of liquidity into the economy. You are seeing some attempt to try and support the interbank market and things like that. But really it seems to us, particularly given that in terms of fiscal policy we're not seeing as much action in the eurozone as you would have liked, that you could see the European Central Bank doing more. And there is this sense, and this is extremely bad, both from a practical macroeconomic perspective but also from a confidence perspective, that policymakers in many bits of the world are behind the curve and perhaps the ECB more than most. Certainly the narrative that they put out into the markets is not one which inspires confidence that they're on top of the situation. And that, I think, is a problem.

I don't think you're going to see any major financial institution go under. I think that that's now pretty unlikely. Almost every major government around the world has pretty much underwritten the banking sector. And that doesn't mean that shareholders in the banks won't get wiped out. I think you could well see a lot more institutions get nationalised, and I think that is actually becoming increasingly likely as we move into the second stage of this downturn which is where you move from just purely mark-to-market losses to now this wall of defaults driven by the downturn in the broader macroeconomy, falling back into the banking system and pushing banks to the wall. So I think that that's a significant risk but in terms of banks just disappearing and depositors losing their money, I think that's now pretty unlikely.

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