Have the banks got any guilty secrets left?

Next month is the fifth anniversary of HSBC releasing a trading statement that on the face of it looked fairly innocuous, but which contained this statement: "Deterioration in US housing markets is affecting consumer finance credit quality more broadly than hitherto and loan impairment charges are expected to remain high in these conditions. There is the probability of further deterioration if the current housing market distress continues and further impacts the broader economy."

That was the first inkling on this side of the pond that there were potential problems lying in the caravan and trailer parks of the Southern United States which would inflict untold damage on sub-prime lenders who had offered their owners mortgages they could never repay.

As the gruesome array of products such as securitisations, mortgage-backed securities and collateralised debt obligations unravelled at a bewildering rate, the world's banking system was on the brink of collapse.

Two years on, by the end of 2009, the UK had been forced to bail out Royal Bank of Scotland and Lloyds to the tune of £65bn, nationalise three former building societies – Northern Rock, Bradford & Bingley and Alliance and Leicester – and Barclays had turned to Middle Eastern investors for a £7bn cash injection.

Thousands of bank staff from cashiers to chairmen and chief executives have lost their jobs. And Sir Fred Goodwin, the architect of RBS's downfall, last year lost his knighthood.

Banks have been forced to slash their balance sheets, cut back their riskiest assets and even reduce their top bankers' pay. But even now the country's most senior banker does not believe the banks have done enough.

Sir Mervyn King, the Governor of the Bank of England for another eight months, this week said: "Just as in 2008, there is a deep reluctance to admit the extent of the undercapitalisation of the banking system in many parts of the industrialised world."

He added: "I am not sure that advanced economies in general will find it easy to get out of their current predicament without creditors acknowledging further likely losses, a significant writing down of asset values and recapitalisation of their financial systems. Only then will it be possible to return to a more normal provision of the vital banking services so crucial to an economic recovery."

That is bad news for shareholders in banks, including the Government with its 82 per cent holding in RBS and 40 per cent of Lloyds. Little wonder that Jim O'Neill, chief executive of the body that looks after those stakes, UKFI, told MPs on Tuesday that there was little chance of any kind of share sale any time soon.

He said: "A lot needs to change before full value can be recognised."

Gary Greenwood, banking analyst at Shore Capital, rates only one of the big four listed UK banks as a "buy" (Lloyds) and the rest as mere "holds". Consumer choice will be improved next year when current account portability becomes enshrined in law but the differences between what each bank offers remain frighteningly indistinguishable.

In terms of regulatory measures, UK banks are indisputably safer than they were five years ago. Most of them, under the new leaderships of Stephen Hester at RBS and, more recently, Antony Jenkins at Barclays, are slashing back their risky investment banks and concentrating on becoming boring banks and bankers.

But the risks remain. Mis-selling PPI refunds have now topped £10bn, Libor-rigging penalties will run into the hundreds of millions and money-laundering punishment in the US has only just begun.

What we do not know are the other undiscovered scandals lying in the banks' deepest vaults.