The US financial system is being nationalised. The piecemeal approach which culminated with the AIG operation was clearly not working. The US government had taken control of its biggest insurance company just two weeks after it had to save Fannie and Freddie, by far the world’s largest mortgage underwriters. All this was not enough to restore orderly market conditions, hence the US political system is working over time to find a general solution whose outline is already apparent. The US government is going to buy the so-called “toxic” assets still on the banks’ balances and will then recapitalise the banks to the extent that they make losses. As a result, it will soon own a large share of its own banking system.