Such is the popular feeling of anger towards banks and bankers that, even before Sir David Walker completed his Treasury-commissioned review of the governance of financial institutions, he was being widely dismissed as a City old boy who would never turn on his own. That is unfair both to the man and the report as it has been finally published. Sir David is a wise old bird with considerable experience, and what he has to say is both sensible and useful.

Bank boards, he argues, failed to control their own institutions in the run-up to the crash. The solution, he proposes, is for the standard of non-executive directors to be sharply raised, for company chairmen to be required to devote two-thirds of their time to the business and for new risk committees to be set up, chaired by non-executives.

On the highly charged issue of bonuses, he suggests a far greater degree of disclosure of remuneration, not just of the board but of the main traders and executives. Bonuses, he says, should be paid over a longer time-frame and remuneration committees should be more accountable to shareholders.

This is fine as far as it goes. All these moves would make banks better governed and so have much to recommend them. But we should not imagine that such moves are sufficient to stop a repeat of last year's financial cataclysm. There is nothing in Sir David's proposals that would seriously challenge the bonus culture that, as we are seeing, still prevails in large financial institutions. Nor is there anything that would have averted the misjudgements that led to such crazy risk-taking in the years of the credit bubble. Even well-qualified and hardworking directors were caught up in the madness.

To have any chance of preventing future crises, we need direct oversight of the banks by independent regulators with the expertise to know what is going on and the power to put a stop to bad practice.

Sir David provides some useful measures that would make banks more accountable to their shareholders. But when it comes to reducing systemic risk throughout finance, self-regulation by the banks is not the answer.