One reason ANZ surprised itself, and the market, over the level of bad debt among businesses was that the bank failed to notice until very late in the half year the increasingly difficult circumstances many clients were in.So even though ANZ's managing director had warned much earlier than other bankers of the dire international outlook, the bank seems to have been taken by surprise at the path of Australia's own shift from slowdown into recession.In answer to a question from Credit Suisse analyst William Ammentorp yesterday, Mike Smith said: "If you think back to the early 90s, the interest rates at the time were incredibly high and so you were able to see the stress on the cash flow, because actually most of it was paying, or a good part of it was actually having to pay interest and you could begin to see where the problems came, quite a long way in advance.  "What is happening now is that the interest payment is very low and of course gearing is actually much lower than it was in the early 90s.  So you're having to look for other signs and for example stock levels I think is still a good one.  "How far are our average receivables out there, has the cycle moved? Which it seems to have done from sort of 30 days to 90 days or longer in terms of receivables. "Turnover customer concentration and indeed what is the tangible worth of the company, we've had a couple of instances where really we've been lending to a company that has one product to one customer and you've got to say well that is never going to be a very sensible risk.  "So I think it's coming back to banking 101, frankly. It's getting back to some of those fundamental things that we all learned back in normal times.  And I think that the relationship aspect is critical here, you don't find out if somebody's going wrong by sitting at your desk.  "What happens is that by, well you might read it in the paper by which time it's too late and you've got to go out and kick the tyres and I think that's what we're encouraging our people to do."