The only effective form of regulation is for the banks to be fully nationalised under democratic and popular control and run for the benefit of ordinary people, not the super-rich. Those struggling to pay their mortgage could have it converted to an affordable rent; small businesses could get cheap loans and public works such as a massive house-building programme could be cheaply financed.
But that is not the conclusion of Vickers' Independent Commission on Banking (ICB). The banks that brought the world economy to within hours of collapse, and racked up the deficit in Britain that workers are now paying for with their jobs, pensions and services, will barely even have their fingernails trimmed.
The ICB was a product of the public pressure to do something following the bank bailouts when the government effectively nationalised Northern Rock and took a 84% stake in the Royal Bank of Scotland and 43% in HBOS/Lloyds-TSB.
Before 2008 the banks used the deposits from their high street operations to gamble on the stock markets and the trade in derivatives. This led to huge profits but when the sub-prime crisis hit in 2008, the whole house of cards came tumbling down and taxpayers were forced to bail the banks out in order to guarantee those deposits.
Given the massive attacks that the government of Con-Dem millionaires launched on the public sector they had to be seen to do something about the banks that had caused the crisis in the first place. They were out of control, paying the executives who had presided over their near-collapse huge salaries and bonuses while ordinary people were expected to tighten their belts.
Undoubtedly there was also a section of the capitalist class who felt that the recklessness of the banks endangered not only the economy but the capitalist system itself.
Margaret Thatcher had laid the basis for the banking crisis with the deregulation of the banking and finance industry in the 1980s, policies that were continued by Blair and Brown to the extent that now the economy is dependent on them.
The government is desperate for economic growth following the Great Recession and the extremely weak recovery but, because of the dominance of finance capital in the economy, are fearful of 'killing the goose that laid the golden egg'.
So the commission is merely recommending that by 2019 banks 'ring-fence' their retail operations from their investment arms so if a similar situation occurs, theoretically the investment arm could go bust without the bank needing to be bailed out.
There is nothing in the report on curbing the speculation that even now threatens to bring whole economies, like Greece, Italy or Spain to their knees; nothing on reducing the obscene multi-million pound salaries and bonuses; nothing on forcing the banks to lend to small businesses and hold back on evicting homeowners who get behind with their mortgage.
In addition, the changes will hit ordinary customers, who will probably start to be charged for accounts and other services which were previously free, because the investment arm of the banks will be hived off and more profits will go to the shareholders. But even this is too much for the bosses' organisation the CBI which is complaining about the cost to the banks (which will be passed on to customers anyway) and that they may move abroad to places with even lighter regulation.
We need to build a new mass workers' party, which stands on a socialist programme including the nationalisation of the banks.