Made in Britain. Driven in the USA. It might sound like an advertisement for the remnants of the UK car industry, but it’s a pretty good description of the proposal unveiled yesterday to bail out the American banking system. Henry Paulson, the US Treasury Secretary, took possession of a financial emergency rescue vehicle first used by Alistair Darling a week ago, a streamlined plan in British racing green, to buy equity in some of the nation’s leading financial institutions.

Most striking about what might be called the Brown-Bush, Darling-Paulson plan is that it is an explicit repudiation of the first iteration of the US Administration’s proposals that passed through Congress after such a rumpus two weeks ago.

Then, Mr Paulson rejected the idea of direct injection of capital by the Government into banks. Instead, his recipe for recovery was to buy toxic assets from banks, helping them to shore up their capital indirectly. Investing directly would represent “failure”, he said back then. The basics of the new plan – recapitalisation rather than nationalisation, it is being called – are similar to the British one. As the British Government did, the US has picked a small group of banks – nine to Britain’s four – for the capital treatment. The scale of the US effort is obviously larger, given the size of its banking sector – $250 billion to Britain’s $85 billion. What’s more, the number of banks that will eventually receive the US taxpayer’s largesse is much larger.

The idea behind naming banks yesterday was a sort of confidence-building exercise in subterfuge. Most of them are in trouble but not mortally sick. The expectation is that other banks in much worse shape will get the help they need. But by throwing them all together, the desperate banks will not have to suffer the stigma of being identified.

Unlike some of the UK banks that are getting the cash, most of the US banks had to have their arms twisted to sign up. The terms also were slightly different. In the US, the banks will be expected to raise private capital to buy themselves out of the Government’s part-ownership.

The US also followed Britain in guaranteeing a class of debt that officials deem essential if the credit markets are to thaw, and in raising the deposit amount that is guaranteed in the nation’s banks (though only for small businesses). Here, however, the US hopes that the money will come not from the taxpayer, but from the banks themselves in the form of a higher insurance premium. To be fair to the US authorities, it seems likely that the U-turn announced yesterday was not simply a matter of wanting to emulate those clever Brits – there were many in US official circles who favoured a partial nationalisation of banks all along.

Senior Federal Reserve officials were sceptical about the likely effectiveness of Mr Paulson’s original plan, but the Treasury Secretary is understood to have been reluctant to suggest a direct equity investment plan to Congress, where it would have been likely to get an even more hostile reception from free-market Republicans than his initial proposal, which they denounced as “socialist”.

With the bailout finally through Congress, and politicians out on the campaign trail, Mr Paulson could use his new authority to shift some of the $700 billion towards the direct-equity route.

Perhaps the best explanation then for the delayed US decision to copy the UK lies in differing political cultures. In Britain, the Government can decide to do something and, thanks to the parliamentary system, it becomes a law in an instant. Under the US Constitution, that is not supposed to happen. They launched a revolution 230 years ago precisely to avoid that kind of autocracy.

Still, sometimes, as Americans have discovered, old-fashioned British autocracy can have its uses.

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