Carrying on from last week’s piece about the IMF’s relatively flimsy capitalisation, a couple of correspondents (obviously unwilling to embarrass me in the comment threads) wrote to say that the central banks do have unfeasibly huge amounts of money piled up inside their walls….so maybe in a crisis things wouldn’t be quite so bad.

I thought about this for a day or so and then began to look at the numbers here too – and, more to the point, what central banks do: for they too are prone to all kinds of swings, roundabouts, slings and arrows.

Take the EU’s version, for example – the ECB. Currently it’s stuffed to the gunnels with euros (a currency not many cognoscenti think has a future) and worthless ClubMed bonds collected by its less than frank boss Jean-Claude Trichet. It is the proud owner of 40% of Greek debt and 20% of all Spanish borrowings.

This isn’t exactly what you’d call the ideal portfolio of paper, but the Chinese also face similar risks purely because like all centrals, they’re obliged to hold huge deposits of foreign currency. Any prolonged rise in the Yuan (and between you and me, it’s on the cards) would cost Chinabank an enormous sum close to 10% of total Chinese gdp.

Look if you will at the Swiss, of whom a Russian general once said that they would be the only survivors of a nuclear war. They might not be so lucky in a trade or currency war: when the euro was heading for the sewers two weeks back, the Swiss National Bank spent the equivalent of £3000 for every citizen buying euros to cap the rising price of the Swiss franc. It didn’t do much good: now it’s still got a very expensive currency with which to export, and hundreds of billions of euros it would rather not have.

Or take our own dear old Threadneedle Street Dame. There is more dodgy debt in there than you’d care to imagine….plus of course a potentially bottomless pit of support were another crisis to hit our banks. And on the other foot, let us not forget that with interest rates at 0%, a huge proportion of UK gilts debt is owned by the banks. While in the short term this allows them to sit on their ample backsides and make clear profits (thus ensuring that Vince Cable bangs his head against a wall of lending indifference) were the Treasury itself to come under pressure, it truly would be one for all and all for one: the ship would go down with all hands.

Throughout Europe and the US in fact, most ‘local’ banks at the moment remain highly dependent on cheap money from central banks – the locals themselves having frozen wholesale markets by being too nervous to lend to each other. This too is ripping increasingly big holes in the balance sheets of the centrals – and whether they decide to soak up worthless bonds or not any more, those Big Banks really cannot stop the cheap money supply, or genuinely disastrous insolvency would result.

The bottom line is this: even if a central bank has ten trillion something or other with a notional value on the paper, in a serious crisis ten trillion times nothing is still nothing. The domino principle applies, as with almost every other element of our mad fiscal and financial system: confidence in everything depends on confidence in something else. When nobody has confidence in anything except precious metals, the paper become so much toilet tissue.