When Clearstream, the international securities depository, admitted that it had overvalued the assets under its custody by &euro910bn ($850bn) last year - and by another &euro643bn in January - it was just the latest in a long series of blunders, oversights and expensive errors that custodians are prone to make. Although custodians regularly boast about their commitment to the security of clients' assets, they can be remarkably slapdash when it comes to the practicalities of safeguarding other people's property.

Ever since 1982, when the collapse of Drysdale Securities and Lombard-Wall demonstrated that securities lending was far from a risk-free business, custodians have managed to get their fingers burnt with remarkable regularity. More often than not, however, the custodians are adept at keeping the news quiet - unless, of course, the losses are so substantial that they have to be noted in the accounts. That was the fate of Mellon Bank in 1994, when it announced that it would take a $130m charge against its securities lending operation. This painful hit was the result of a very serious misreading of the yield curve by the traders responsible for cash collateral reinvestment. To be completely fair to Mellon, it was far from the only bank to suffer in this way, although only Harris Trust owned up publicly.