It's now four years since the banks started to go belly up. There have been no shortage of politicos telling us we need "reform".
But what reform?
Apart from handing over billions of pounds in bailouts to the banks, what has actually changed? Remarkably little, it seems.
To be fair, the international Basel banking rules were tightened up. This means that banks that lend out massive multiples of any money that they actually have on deposit have had to lend out a little less.
What about the Vickers report? This report by the great and the good calls for a (yet to be implemented) separation within banks between retail and institutional operations. I am not sure that that will mean. Nor, I suspect, do the "experts". Would it have prevented the systemic failures that we saw in 2007-09?
Once again, our political elite seem to be drawing up policy in the belief that they can arrange human affairs by grand design.
A much wiser approach might be to recognise that they do not know what shape banking we need, but allow organic change.
At the heart of our broken model of banking sits an ambiguity; is the money people pay into their bank a loan or a deposit? Until folk opening a bank account are required to clarify if what they are paying in is a loan to the bank, to be lent on by the bank multiple times, or else a deposit, kept safely, we will not solve the problem.
All that Vickers does is create a horizontal division between retail and investment banking within institutions. What we need rather is a vertical separation within banks between money lent to them and money deposited with them. I introduced a Bill in Parliament to do precisely this a couple of years ago.
Properly run, trusted banks would thereby see more customers prepared to pay money into the bank as a loan, not just a deposit. This way they would automatically have a lower capital ratio. Well run fractional reserve banks could be more fractional, so to speak.
Badly run banks that we did not trust would find fewer punters willing to pay in loans, and thus automatically have higher capital ratios.
In other words, it would be far less likely that fractional reserve banking would run out of control and bring down the banks. Now that would be real reform.
"A revolutionary text ... right up there with the Communist manifesto" - Dominic Lawson, Sunday Times
Printed by Douglas Carswell of 61 Station Road, Clacton-on-Sea, Essex