In the end – and thank goodness – it is the historians, not the professional commentariat, the lobby-fed hacks, the passing-through politicians, the careerist civil servants or some of the clowns masquerading as experts, who will get to decide the heroes and the villains of the 2009 financial crisis.
But I would like to enter a plea that when that history is written, the Governor of the Bank of England, Mervyn King, deserves to be given a starring role as he's the only person of any gravitas who is thinking the unthinkable about what sort of banking system we want, and how best to repair the damage of the crash. I was going to compare him to the Lone Ranger but I see he's just described himself as not unlike footballer Matt Le Tissier taking a penalty.
At the Lord Mayor's City dinner last Wednesday, King showed Le Tissier-like skill when he delivered not one but three penalties with such devastating effect that I'm not sure whether the walls of the Mansion House will ever quite recover. His first spot-kick was aimed directly at the Government over fiscal policy, warning ministers that they must come up with a clear plan as, five years from now, the national debt is likely to be more than double its level before the crisis.
Second, closer to home, King made his own plea for "a macro-prudential" toolkit to allow the Bank "to prevent the size, leverage, fragility and the risk of the financial system from becoming too great". He hasn't said what tools he would like – although he may give more flesh at this week's Treasury Select Committee – but they are likely to include measures such as counter-cyclical capital ratios and more dynamic provisioning.
His last kick – and the one which has caused most pain in the City and at the Treasury – was his call for some sort of separation between retail banking with "risky investment banking or funding strategies" – or, as he puts it, "a certain type of banking" if banks are to be guaranteed by the taxpayer.
While King believes there is a case for reform, he was careful not to call for a new Glass-Steagall separation of activities even though many have jumped to this conclusion. America's Glass-Steagall act, which separated broking from retail banking, was far too simplistic a solution, addressed different problems, was designed for another era. More pertinently, what King was saying was that we can't accept the status quo. Clearly it's wrong that banks can use the balance sheets of their retail depositors to gear up and then, when things go wrong, expect the taxpayer to bail them out.
Rather than new Chinese walls, King suggested instead a menu of three options: state guarantees should be limited to banks with little risk; higher capital ratios should be required of those with high risk, or new resolution powers should be brought in for the orderly winding-down for the more complex institutions. That would mean that banks such as Barclays, HSBC, RBS and possibly even Lloyds, which have retail deposits and "risky"' investment banking, may well be forced to unravel, or certainly raise even more capital at some point.
There will be other options but King should be thanked for bringing the debate out into the open, even if it meant a few kicks. Anything but a full-blooded debate between the politicians, the bankers and the regulators – both nationally and internationally – makes a mockery of the past year and the huge cost to the taxpayer. Socialising losses and privatising profits cannot be tolerated.
Bzzzzzzzz SWAT! Barack Obama takes aim at the bankers
While UK politicians were suggesting there was not much wrong with the status quo, across the Atlantic President Barack Obama took a swat at bankers which was as harsh as the one that crushed that poor, buzzing fly during his interview with CNBC. The President's plans to toughen up the Federal Reserve have caused much consternation on Capital Hill, while on Wall Street, bankers are waiting for the detail before they give their verdict.
But, as Robert Reich says, the bankers will fight the reforms all the way if they do what is really necessary – which is to stop them taking risks with other people's money, prevent any bank from being too big to be permitted to fail, and root out conflicts of interest such as those surrounding the credit rating agencies.
Rudd returns to his roots with £500m fund to help struggling firms
You know something interesting is up when Sir Nigel Rudd steps into the fray. The BAA chief and ex-deputy chairman of Barclays is returning to his roots – as chairman of a new £500m fund to help finance small European firms caught out by the recession.
He's heading up the fund put together by private equity boutique Marwyn and backed by Royal Bank of Scotland. Morgan Stanley International's former chairman, Jonathan Chenevix-Trench, is also on board.
Sir Nigel became involved after Marwyn heard him talk at a lunch, when he said the present climate reminded him of the 1950s when 3i – then under a different name – really got going with lending to new ventures, heralding the dawn of venture capital. But today's recession also reminds him of the 1980s when good firms struggled to refinance. He should know, as it was the 1980s when Sir Nigel, with Brian McGowan, built up his first conglomerate, Williams Holdings, by acquiring under-performers such as Crown Berger paints.
It's good to see RBS is sticking its neck out after the disastrous lending of the past years, promising to explore all avenues to help customers through tough times.
The fund will invest convertible debt and structured equity into UK and European firms, with an enterprise value of up to £1bn, which face short-term problems. As Sir Nigel points out, there are hundreds of sound firms with too much debt because they borrowed so much when debt was cheap, and which are stuck for new lending. That's when Marwyn rides in, swapping debt for equity, allowing management to get on with the business and taking some equity themselves.
As Mervyn King, the Governor of the Bank of England, warned again last week, the banks will need more equity capital before they can start lending enough to revitalise the economy. In the meantime, Marwyn's fund is an encouraging start.
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