As we come to the end of an era in which money was practically free, the big question is what the fallout will be from rising interest rates. It isn’t difficult to spot possible problems.

Many governments look vulnerable. There are concerns about the UK, where the national debt is now equivalent to roughly 100 per cent of economic output. But what about Italy, where national debt is 150 per cent of national income? Might it succumb to a new vicious circle of rising debt and borrowing costs? How long can its bonds be propped up by low interest rates in the eurozone and backstops provided by the European Central Bank?

For Japan, government debt sits at 260 per cent. The Bank of Japan has begun to question how long its ultra-loose monetary policy can last – an aspect of its financial system that wasn’t really interrogated until now.

More commercial banks may wobble. Doubts have swirled around some big names in Europe for many years, notably Credit Suisse, whose shares tanked this week amid fears that it might be next. Investors withdrew $120 billion in the final three months of last year because of worries about the bank’s financial health. But its share price had been falling for even longer, down 68 per cent over the last year. Concerns that even the banks’s biggest shareholder may not be willing to stump up more money to support it have added to the worries.

It had been assumed that these banks would benefit from the higher profit margins that usually accompany higher interest rates. But these margins could be eroded if banks have to pay more to attract and retain deposits from nervous investors.

Britain’s banks at least appear to be relatively safe, well-capitalised and liquid. Silicon Valley Bank’s (profitable) UK arm found a buyer, HSBC, without any great risk to the taxpayer. But the clumsy US bailout of SVB in California could lead to more crises, as people and companies take on extra risks in the expectation of a bailout if things go wrong. Indeed, the more aggressive response in the US may already have backfired, by creating the impression that the immediate problems could run even deeper than anyone thought.

In turn, this could trigger a further panic in other markets. Both No. 10 and the Bank of England insist that the UK’s banking system overall is ‘financially sound’. But if the situation worsens in the US, it would be near impossible for the UK to avoid ramifications.

Outside the financial sector, significant parts of the UK economy have yet to feel the full impact of last year’s interest rate increases and the tightening in financial conditions. Many smaller businesses are only now coming off Covid support schemes. They could soon find themselves paying far higher rates which they cannot sustain.

And closer to home, how about property? The rise in mortgage costs and increased economic uncertainty has already led to a sharp downturn in the housing market and in housebuilding, both in Europe and the US. For individuals, this could be the tip of the iceberg, as more homeowners come off their current low fixes and must refinance at much higher rates. Not only might people lose their homes; it could result in a housing price downturn unlike anything we’ve seen since the 2008 crash. Bank of England analysis has suggested a sustained 1 per cent increase in real interest rates could lower house prices by 20 per cent.

Commercial property is also at risk. So often used for investment purposes, higher interest rates are making the sector far less enticing. As property deals become more expensive to finance, appetite wanes, which means that fewer projects are built – a loss for both investors and for broader economic productivity.

In 1992, Warren Buffett coined the phrase ‘It’s only when the tide goes out that you learn who’s been swimming naked’. Now that the flood of cheap money has drained away, and interest rates are on the rise, we should expect to see many more unpleasant revelations.