The banking crisis of 2008 proved a great deal. Not least that the UK regulatory and legislative framework simply was not up to scratch.
On regulation, the old tripartite regime in particular simply was not fit for purpose. There was little or no macro-prudential oversight; regulation was too weak and allowed dangerous levels of leveraging; capital ratios were too low; and in the midst of the crisis the overlaps and underlaps of authority meant decisions were either taken too late or not taken at all.
The legislative framework was even worse. There was not even the legal basis to nationalise a failing bank.
The aftermath of the run on Northern Rock brought that into stark relief when there required to be new legislation to do that. And further legislation was required after that to provide for a permanent resolution regime to deal with failing banks generally.
The good news is that a lot has changed since 2008.
The old regulatory architecture has been swept away and replaced with the correct oversight of micro-prudential, conduct of business and (in my opinion, the most important thing) a permanent macro-prudential systemic oversight in the shape of the Financial Policy Committee.
The banks now all hold much higher capital. There is far more attention paid to leveraging and liquidity and the regular stress tests now allow central banks and regulators a much clearer view of where risks may lie within any given institution.
The fact that bank balance sheets have been reduced, together with the introduction of ring fencing, means the public should have far more confidence in the system than at any time since the crash.
But – and it is a big but – there is still a lot to do.
Many of the banks and, indeed, building societies which graced our high streets have gone – or are there in name only – Northern Rock, Alliance and Leicester, Bradford and Bingley, and Dunfermline, to name only a few. All taken over or merged during or in the aftermath of the crisis. And that is before we even consider the big beast of RBS (which, by some measures, was the largest bank in the world), which remains 70 per cent owned by the UK Government.
So another of the consequences of the banking crash is that whilst banks are safer, the choice for consumers on the high street is reduced.
That reduction in choice is not simply about which bank to give your custom to; it is also about the products available to the consumer, and the area which highlights this most starkly is mortgages.
Prior to the crash, in July 2007, there were almost 28,000 mortgage products available in the UK. By 2009, that had collapsed to under 2,300.
Even as late as last August, while the number of mortgage products had risen to 4,657 – a substantial increase since 2009 – it still reflects an 80 per cent reduction in mortgage products available, compared to the pre-crash levels.
What is clear is that new competition and choice is coming. But that is mainly on-line competition.
Traditional high street bank branches are closing with, for example, RBS targeting another 62 closures in Scotland alone.
So while we may, one day, get back to the level of products and banks we had pre-crisis, the way the public transact with their banks will have changed forever. It is vital then that policy-makers ensure that digital exclusion does not drive exclusion from banking services.
Of course, the scrutiny of the banks since the crash also uncovered lots of nasty surprises.
In no area is that more starkly highlighted than in the treatment of small businesses. Whether it was the Tailored Business Loans offered by Clydesdale Bank or the behaviour of the RBS Global Restructuring Group, many businesses and politicians are still waiting for fairness and compensation to those affected.
For me, that aspect of the banking crisis is the one which remains stubbornly unresolved.
Too many people allege that they and their businesses have suffered at the hands of the banks. The Financial Conduct Authority and the Financial Ombudsman Service have, to many, proved utterly inadequate. That is the key area which must be fixed, if we are ever to return trust and confidence back into the sector.
There is now growing support for an Independent Financial Dispute Resolution Platform.
If we are to truly recover from the banking crisis of 2008, and put trust back at the heart of our banking system, then we must add, to the welcome changes already made, that new independent resolution regime.
However, all of the positive steps which have been taken, so far, could be undermined and the entire banking sector thrown into turmoil if the Brexit agreements needed on financial regulation, and the legal basis to do cross-border business, are not resolved properly and quickly.