Market watchers have expressed astonishment that the International Bank of Bad Debt and High Risk collapsed on Friday, with billions wiped from its asset sheet.

“No-one saw this coming,” said Jez Foresight, editor of the Financial Foresight newsletter.

Problems emerged with the bank’s liquidity last week when 14-year-old CEO Danny Ralson, speaking from his bedroom, declared, “There is zero problem with liquidity, whatever that is. I have to go to bed now.”

He failed to reassure a jittery market, prompting a full-scale run.

Ralson had started the bank as a joke when he was 12 but saw receipts top a billion in the first few months.

Since then, it has cornered the market in stupid decisions and broken promises, a monopoly that turned the heads of normally staid City money managers who were looking for impossible returns to lie to clients about.

Last night, the Treasury and the Bank of England were working on a multi-billion-pound bailout package with one insider saying, “If this dumb bank fails, people are going to begin asking serious questions about the viability of all the other dumb banks.”