Five years ago next Tuesday, an embattled US Treasury announced that it would conduct “stress tests” of America’s largest banks. The idea was to reassure the markets of the stability of solvent institutions, and force weaker ones to repair their balance sheets.

Some academics still question whether this exercise was rigorous enough. There is controversy, for example, about how much capital modern banks need, and how far asset prices can reasonably be expected to fall in the event of another crisis. But one thing is clear: stress tests were surprisingly effective in helping to turn investor confidence around.

In February 2009 bank shares were falling sharply, and a poll by Bank of America Merrill Lynch found that investors were so nervous about global banks that half of them had allocated a smaller proportion of capital to the sector than the industry average.