Ten years on, capitalism might not survive the shock of another Lehman | Will Hutton

Governments have failed to force banks to protect themselves from risks - and some are greater than they were a decade ago

Ten years ago this weekend, frantic efforts were being made to save one of the biggest banks in the world. When chancellor Alistair Darling overruled Barclays' supreme stupidity in considering the takeover of the stricken Lehman Brothers investment bank - the extent and complexity of its debts would have brought down both it and probably the British banking system - the die was cast. Lehman collapsed and the shockwaves are still felt to this day.

Suddenly, the proud buccaneers of high finance were exposed as "sapient nincompoops", as the great economic commentator Walter Bagehot described the senior executives of Overend, Gurney & Co in the wake of its collapse 150 years earlier. All the assumptions made by a generation of free-market economists, conservative politicians and the financial establishment were shown to be ideological tosh propagated by today's nincompoops.

Finance can do more or less as it likes, but if it collapses, be sure that governments will be asked to step in again

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