It’s worse than we feared and there’s more pain to come, but it will pass

Gerard Baker

The spectacle of customers queueing outside a small California bank on Monday to withdraw their deposits was unsettling enough for an American public already traumatised by a year-long financial crisis.

But there were two things about the collapse of IndyMac, a lender based in Pasadena, just outside Los Angeles, that were especially troubling.

The first was that, as the federal authorities moved in to rescue the failed lender, they revealed that they had for some time been compiling a lengthy list of banks around the country that, because of their mounting difficulties, had been placed on a kind of death watch.

The scarier thing was that IndyMac was not even on the list.

Read more: It’s worse than we feared and