Bail-as-you-Go. The latest big bank bail out.
Last month all of us effectively signed a new monthly contract, without really realising it. It wasn't for a new mobile, a new TV sports package, or even for a new car lease. Rather it was a monthly package to bail out our banks, to the tune of at least £5 billion a month.
The new bail out came in the form of the Bank of England's 'Extended Collateral Term Repo Facility' (ECTRF). Don't worry about the fancy language. It's another bail out, every month, for at least £5 billion. Bail-as-you-Go, you might say.
The Bank of England (BoE) set up this monthly drip-feed for the banks rather than offering one big wad of cash so that we didn't notice it quite so much, and so that things didn't look quite so critical.
But they are; in fact the BoE can only intervene in this way when there is 'actual or prospective market-wide stress of an exceptional nature'. Basically another credit crunch was about to hit and the state had to step in again to save the banks from their own bad assets.
How do the banks get the cash? By selling the BoE dodgy debt, which they package up into financial suasages and then flog to the BoE. That includes some rather unsavoury stuff on the banks' books which has been hanging round for a while damaging the banks' balance sheets and which can now be offloaded to the BoE for hard cash.
Such dodgy debts include credit card debt, sub-prime debt and commercial property and dodgy business investments that have been festering for some time. The BoE hopes it can sell these dodgy assets later on.
This hasn't really been picked up by commentators - an exception being fellow Post blogger and columnist John Clancy. As Clancy rightly points out in his excellent column, there are in fact two bail outs going on here.
The other bail out, which media reports did pick up on, was the "Funding for Lending" (F4L) scheme. That's the one devised by HM Teasury and the BoE to lend £80 to £140 billion to British-based banks at below market rates, in turn attempting to tie these to real lending at those sorts of levels to real firms in the real economy.
Er, haven't we been here before with Project Merlin, credit easing and the Loan Guarantee Scheme? Are banks really going to pass the money on? And do they actually have the expertise to even judge which small businesses should be lent to, when 'Computer says No' is the norm for many small firms, especially in manufacturing, when they approach the bank? I'm sceptical it will work to any great extent.
(By the way, that scepticism has increased in the wake of the latest mis-selling scandal, where Britain's big banks mis-sold interest rate hedging products to small firms. The Financial Services Authority (FSA) said it had found "serious failings" in the way these products were marketed).
So it's a double-whammy of bail outs. Don't forget that last time round, according to the National Audit Office, we gave £1.2 trillion of loans and guarantees to British banks, of which £500 billion is still outstanding.
The latest scheme, F4L, may help to some extent, but what we really need is a state backed small business bank, supporting lending to small firms. If the United States can do it, why can't we?
Professor David Bailey works at Coventry University Business School