The plan outlined by the Chancellor and the Governor of the Bank of England last night is an ingenious one: in return for easily tradable government gilts, banks must commit to increasing the amount they lend to small businesses. With the economy flat-lining, confidence on the slide, and the outlook from Europe growing more alarming daily, all and any efforts to stimulate growth are welcome.

It would be a mistake, however, to expect too much. Given that the scheme will be voluntary, there is no guarantee either that banks will participate, or that they will find businesses to which they can pass on the benefits. There has, after all, been any number of schemes designed to boost lending in the aftermath of the financial crisis; none has yet had much impact.

Alongside his endorsement of the "funding for lending" plan, George Osborne also used his annual Mansion House banquet speech to press ahead with banking reform. It is to the Chancellor's credit that he has largely stuck by the recommendations of Sir John Vickers: legislation this autumn will include measures to increase the capital that financial institutions must hold, put normal savers first if the bank goes under, and – most significantly – separate retail deposits from risky investment operations. So far, so good. But neither the banks, nor the Chancellor, nor the rest of us, can afford to be complacent.

There are two separate points at issue here. One is to ensure retail deposits are not gambled away in opaque and incomprehensible derivatives trades. In that, the Vickers reforms are a step forward. But the systemic risk to the economy remains unaddressed.

In theory, with the ring fence in place, the Government could allow, say, Barclays Capital to go to the wall. In reality, however, it could not. When investment-only Lehman Brothers collapsed in 2008, the shockwaves ricocheted around the world. Were another Lehmans in the offing, it would be a brave government – if not an actively reckless one – that let it go.

Neither is there much to suggest that banks' behaviour has changed, as the spectacle of Bruno Iksil at JPMorgan – dubbed the "London whale" for his vast trading positions – caught out to the tune of $2bn makes plain. Truly safeguarding the economy will need a change in the culture of the industry, which means addressing such vexed questions as proprietary trading and pay.

On both counts, then – stimulating the economy and banking reform – Mr Osborne and Sir Mervyn King have made a start. They are to be applauded, but only on the understanding that the thinking does not stop here.