The Plan, as revealed by Federal Reserve chairman Alan Greenspan last week, was another cut in US interest rates. The market, which had been looking for the cut, was still nervy about it.

It's an illustration of the paranoia that exists right now that even when the Fed does something that the market wants, the market then decides that things are even worse.

The logic is that since the Fed felt it necessary to provide cheaper credit to the market, the Fed knows of even more problems in the banking system and is hoping to stave off wholesale collapses.

Actually, I don't think the Fed knows anything of the sort. But it doesn't take Alan Greenspan to know that the banking system is as nervous as a kitten at the moment and that every little helps.

Everyone was talking about the price of money and its availability this week. Once again, the bogeymen of the market are the hedge funds which have borrowed heavily from banks their (now loss-making) positions.

The bankers - finally remembering those lectures about prudential lending that they went to years ago - have decided that these loans are bad news and that the hedge funds should repay them. Particularly coming up to year-end.

There's nothing that gives a banker more sleepless nights than knowing of a potentially non-performing loan on the books at year end.

Except, perhaps, the knowledge that the loan is to a hedge fund in which he has already invested a portion of the bank's capital.

I guess the management at BankAmerica Corp is feeling particularly sleepless right now. Class-action suits have been filed in the US since shares in BankAmerica fell sharply following its disclosure of a $372 million (£243 million) loss on a loan. To a hedge fund, of course. The loan was $1.4 billion and it was to DE Shaw & Co. The lawsuits are alleging that BankAmerica management made "false and misleading" statements about loans and investments relating to hedge funds prior to its merger with NationsBank last September.

The allegations are that the executives knew about the losses but didn't want to reveal them in case the merger would crumble and the entire $1.4 billion would end up being written off (instead of only part of it).

I don't know which would make you more sleepless - a $1.4 billion loss or the idea of a lengthy battle in the US courts.

Meanwhile, David Shaw - chairman of DE Shaw, maintains that the firm's positions were very carefully hedged. (See, that's what a hedge fund is meant to do!) Everything was going well until August (sound familiar?) and, in fact, although DE Shaw was losing money it wasn't losing it nearly as quickly as other hedge funds. I'm sure that comes as a great relief to the management of BankAmerica.

Anyway, David Shaw says that it underestimated the liquidity risk in the market and (a master of understatement is Mr Shaw) if they'd known how bad things were going to get, the positions would have been smaller.

Actually, I prefer the comment made by Michael O'Neill, president of BankAmerica's financial services group, "I'd rather not be where we are. Given David's track record, it seemed like a good deal at the time."

It looks as if Merrill Lynch might also be facing a lawsuit over its exposure to Long Term Capital Management (LTCM). According to this particular suit, the directors had a "sustained and systemic indifference to the type and quality of the company's investments/loans".

Merrill has also axed 3,400 jobs and the head of Global Risk Management, Daniel Napoli, has been demoted.

At least Napoli still has a job - Christian Maurin of Credit Agricole Indosuez, Marinus Minderhoud of ING and Mathis Cabiallavetta of UBS have all resigned in the last couple of weeks.

No lawsuit expected from the billionaire investor, Warren Buffet, who apparently invested $270 million in West End Capital, a Bermuda-based hedge fund.

West End has only lost 10 per cent of its net assets so far this year and, according to the fund manager, borrows a mere 10 to 15 times its capital. Looks like a shining light in the black hole of hedge funds. . .

Meanwhile, back home, a new motif has taken over the Amiens street area near the IFSC. The Pig and Heifer is the name of a deli which has recently opened for business, while the pub on the corner is called The Squealing Pig.

Having a pub named The Squealing Pig located beside the City Morgue and the revamped Garda station is an interesting concept, though the visual images it conjures up are not for the fainthearted.

Not for the faint-hearted, either, was the interbank's sports tournament held in Belfast last weekend. Our parent, Ulster Bank, was the host this year and did a great job, naturally.

Unfortunately, it couldn't fix it for the badminton team, on which I featured, to win anything despite the best efforts of the squad.

We didn't even do as well as usual at the post-match festivities owing to injury and illness which was definitely a first - although full marks to one of the team for not making it to bed until almost six o'clock on Sunday morning and still being up for breakfast by nine.

It's good to know that, no matter what's going on in financial circles we can still engage in the more traditional sporting endeavours.

Mind you, while the rest of us were drowning our sorrows in the late evening, the chess players were involved in so-called friendly matches. I worry about the chess players - there's an intensity about chess that is very similar to hedge-fund management. But I don't think there was much by way of hard cash riding on the result of these matches - it was all for the glory of the bank.

Sheila O'Flanagan is a fixed-income specialist at NCB Stockbrokers.