Without a proper reassessment of the role of finance in our economy, the crash could easily happen again

If, as the saying goes, "everything changed" after the terrorist attacks of 11 September 2001, it could be argued that "nothing changed" after the equally world-historic events of 15 September 2008.

The collapse that day of Lehman Brothers triggered what one Bank of England official called "the largest financial crisis of its kind in human history" and brought the world to the brink of economic depression. In the immediate aftermath, world leaders - inspired by Gordon Brown - came together in order to rescue the banks and shore up the global economy with a multitrillion-pound fiscal stimulus. The Prime Minister's leadership prompted the Nobel Prize-winning economist Paul Krugman to ask: "Has Gordon Brown . . . saved the world financial system?"

A year on, however, those same politicians are still bickering over how to reform the financial system. And as this magazine's new economics columnist, the former member of the Bank of England's Monetary Policy Committee Professor David Blanchflower, points out (from page 16), "the risk of a long-lasting economic depression is not over" and the much-heralded recovery "remains fragile". There is a real danger of a "double-dip" recession. Blanchflower, it should be remembered, was the only member of the MPC to argue, during 2007 and early 2008, that unless interest rates were cut, the economy would go into a deep, downward spiral. In doing so, he set his face against what he now calls the "tyranny of the consensus".

It's a tyranny that dies hard. As a new buzzword sweeps the City - "BAB", or "bonuses are back"- where is the anger at the grotesque spectacle of Goldman Sachs, bailed out to the tune of almost £6bn by the US treasury, giving its staff the biggest bonus payout in the bank's 140-year history? Where is the moral indignation at 72 former Dresdner Kleinwort traders announcing that they plan to sue that bank for £30m in unpaid "guaranteed bonuses"? Has "bailout outrage", as described by the Harvard philosopher Michael Sandel on page 34, already dissipated?

The disgrace of the political class over the expenses scandal has distracted the public from the sins of the City. It is understandable that people should wish for things to go back to the way they were before Lehman went down. But without public outrage, there is no pressure on the politicians and regulators to effect essential and lasting change in the financial sector.

“BAB" is not the only sign that the City is on the verge of a return to pre-crash recklessness and excess. How about a “Re-Remic", which rhymes ominously with epidemic and stands for "resecuritisation of real-estate mortgage investment conduits"? These are, to all intents and purposes, repackaged and renamed collateralised debt obligations, the fiendishly complicated investment tools that helped cause the crash in the first place. The Financial Times has called Re-Remics "mutton dressed as lamb" - but that has not prevented them becoming increasingly popular as a way for banks to sell off bonds backed by commercial properties.

One is tempted to ask if these people will ever learn - especially as the government shows little inclination to teach them a lesson. There has been little or no movement from the Treasury on thorough reform of finance: no cap on pay, no breaking up of banks deemed "too big to fail", and no division of retail from investment banking. It is a sad indictment of Labour's continuing love affair with the City that it is left to the chairman of the Financial Services Authority, Adair Turner (profiled on page 22), to call for a so-called Tobin tax on the "socially useless" financial transactions of a "swollen" banking sector. Centre-right leaders on the Continent, such as Nicolas Sarkozy and Angela Merkel, push for action on bank bonuses, only to be blocked by centre-left governments in the US and the UK.

Two things have become clear over the past 12 months. First, the only people who have not been harmed by the banking crisis are the bankers who caused it. Second, banking is too important to be left to bankers. Without a proper reassessment of the role of finance in our economy, the crash could easily happen again. In the words of the philosopher George Santayana, "Those who cannot remember the past are condemned to repeat it."

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