Vast losses at RBS are a legacy of a failed system | Will Hutton

Our economy is at a watershed. We need a new capitalism that will stop firms thinking in the short-term

It may have been nine years ago, but the financial crisis continues to throw its long shadow over Britain. Last week, RBS, at the time of the crisis the world's biggest bank, announced another stunning loss of 7bn - so chalking up cumulatively some 58bn of losses since 2008.

It is now even clearer than it was at the time that had the government not stepped in, taking a vast 45bn stake, RBS would have gone bust, threatening a more widespread banking panic with cascading consequences hard to contain. At the very least, Britain would have had an even deeper recession - and much slower recovery. At worst, there would have been a full-scale depression.

British companies, because of their fragmented shareholder base, are under pressure to provide good short-term results

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