This week, just after Wellington-based finance company St Laurence said it would ask investors for more time to meet its obligations to them, one of the major bank economists downplayed the effect of the current rash of collapses on the wider economy.

While total investors' funds tied up in the mayhem had hit $2.5 billion, the economist _ taking a similar line to the Reserve Bank in its last report on this country's financial stability _ said the impact was unlikely to be systemically significant.

That money, he said, had not disappeared. Much as it was hurting individuals, it was simply a transfer of wealth.

It's true the latest casualties, including Dorchester Pacific last night, will probably not drag the economy into recession. Fact is, it looks as though we're headed there anyway and the third or current wave of finance company woes are more a symptom than the cause.

The failure of Rod Petricevic's Bridgecorp last year, which sparked the second wave of finance company problems, was a spectacular car crash, arguably caused by incompetence or irresponsibility of the company's management.

But at least some of the current or third wave of casualties more closely resemble roadkill, flattened by economic factors they simply hadn't anticipated. Their common thread is that they are all property development financiers.

On the one hand they have struggled to gather sufficient funds from new and existing investors, but perhaps their biggest problem is the developers they lend to have been unable to repay loans as they fall due.

At least some of the shortage of money available to these developers to refinance their projects can be attributed to the international credit crunch and what is in effect credit rationing by the major banks as a result.

The supply of easy money that drove the biggest property boom we've ever seen has dried up. That has placed $2.8 billion of our savings at risk. It remains to be seen what it will do to our largest store of wealth _ our houses.