This strains credulity ever further. Faith in many banks' capital strength has long since vanished. Repeating parrot-fashion that they remain well capitalised dents confidence that government stress tests will be sufficiently taxing. Does “more challenging” mean unemployment at 9 per cent, for example, or at 12 per cent?

For Citi, at least, this is a mathematical game. Horror of public ownership dictates the government's stake in Citi be kept close to 40 per cent. Setting the price, as announced, at a “modest discount” to share prices on February 9 ($3.95 for Citi) spells a raw deal for taxpayers. At a 5 per cent discount, for example, converting $45bn of existing government preferreds results in a stake of 68 per cent, against about 80 per cent if converted close to the current price of about $2.11. Converting about $14bn keeps the government's stake close to 40 per cent, but only boosts Citi's tangible common equity ratio from 1.5 per cent to 2.3 per cent.

Raising private capital or persuading other owners of preferred shares, about $30bn worth, to convert into common eases the strain. Private capital is out. Even if other preferred holders fall into line, the authorities would need to justify exchanging only a portion of their preferreds (about $30bn-$35bn) to keep their stake below a relatively arbitrary level. This is a juggling act too far. It is time for a decisive, if uncomfortable, move.