09 August 2012 6:57am

It was the early evening of Thursday, 9 August, 2007, when I received a phone call at home from a Citibank dealer in London.

For many years, my organisation had been issuing short-term notes in the euromarkets to finance a geared fund, and some notes routinely rolled over almost every night. It was an excellent source of inexpensive funding, sometimes swapping into Australian dollars at below the domestic bank bill rate.

We posted issuing levels at the end of each Australian day and the London dealers could transact at those spreads without further reference. At the time of...