NOBODY has provided me with evidence of this, but, on the basis that nothing’s new, it wouldn’t surprise me to learn that the ancient Chinese had invented the plastic credit card 3,000 years ago.

So it is with the credit crunch and the international banking crisis. Although this might seem all too much the creation of the modern global economy, there is a long-term precedent. While we believe that nobody before has suffered anything like the present financial turmoil, the first credit crunch is now thought to have occurred long ago and far away – in fact, back in 88BC, some 21 centuries ago. In which case, given the time-span, it makes even more meaningful the Queen’s query on meeting some so-called financial experts a couple of weeks ago: “Didn’t anyone see this coming?”

There’s just one problem. While the new research of Oxford historian Philip Kay reveals how the Romans got into this jam, he has yet to discover how they got out of it.

As you’ve doubtless realised, the problem is all about liquidity (I knew you’d guess). Kay says: “The essential similarity between what happened 21 centuries ago and what is happening in today’s UK economy is that a massive increase in monetary liquidity culminated with problems in another country causing a credit crisis at home.”

So far, so insolvent. He adds: “In both cases, distance and over-optimism obscured the risk.” In other words, as far as the bankers were concerned, out of sight, out of their tiny minds.

Kay, a monetary historian at Wolfson College, who in a timely move left investment banking and fund managing for academia, has made his assessment based on a speech by the Roman orator Cicero, in 66BC, in which he referred to the credit crunch.

Cicero harked back to an event 22 years ago to support his call that Pompey the Great should be allowed to fight Mithridates VI, king of Pontus, on what is now Turkey’s Black Sea coast. He argued that, in 88BC, Mithridates VI invaded the Roman province of Asia, on the western coast of Turkey. In doing so, he sent the Roman credit system into meltdown, as so much Roman money was lost in the invasion. The outcome was that credit collapsed in Rome itself.

Cicero hammered his message home, telling his audience: “Defend the republic from this danger and believe me when I tell you, what you see for yourselves, that this system of monies, which operates at Rome in the Forum, is bound up in, and is linked with, those Asian monies: the loss of one inevitably undermines the other and causes its collapse.”

This speech is “remarkable” for its similarity to modern circumstances, says Kay. All you have to do is substitute “US sub-prime mortgages” for the “Asian monies” and the “UK banking system” for the Roman Forum monies system and it could have been about our current credit crisis.

In Rome, during the second and first century BC, increased imports of bullion, combined with an expansion of available credit, created a huge growth in the imperial capital’s money supply.

“This increase in the supply and availability of money in turn resulted both in a major increase in Roman economic activity and, eventually, in the credit crisis which Cicero describes,” says Kay.

What followed the Roman credit crisis is still shrouded in mystery, admits Kay, as there’s very little known about the following 20 years. We know that Sulla became dictator of the republic, but we certainly should not draw a parallel with Lord Mandelson, our beloved but unelected new business minister.

peter.elson@dailypost.co.uk