King might insist that the Bank of England’s job is not to help banks out of trouble. Instead its statutory priority is to conduct monetary policy in order to meet the inflation targets, and that is all. He might reiterate the arguments he gave to the Treasury Committee in September 2008, possibly adding that the European Commission regarded the state support of Northern Rock in late 2007 as an artificial subsidy that would become illegal after a mere six months.

King’s problem is that his position has been refuted — decisively and comprehensively — by the actions of the European Central Bank in the last few years. Not only did the ECB extend large credit lines to eurozone banks at the start of crisis in August 2007, but it later renewed them on an uninhibited and massive scale. The first big decision taken by ECB President, Mario Draghi, in December 2011 was to institute so-called “long-term refinancing operations” (author’s italics) or “LTROs”, by which any Eurozone bank could borrow from the ECB for as long as three years at an interest rate of only 1 per cent. The arrangements were repeated and expanded in February 2012, and eventually hundreds of banks took advantage of them.

This was the lifeblood of liquidity that revived the eurozone from a near-death experience, and was a particularly important transfusion to the banking systems of Spain, Ireland, Portugal and Greece. It must be emphasised that the facilities were — explicitly, almost brazenly — long-term. Were Draghi and the ECB keen to distance themselves from Mervyn King and his repudiation of long-term central bank lending? Did they want banking organisations around the world to believe that the ECB was open for business, while the Bank of England was closed?

The rights and wrongs of the British banking crisis of 2007 and 2008 will be debated for decades to come. Let it immediately be conceded that most of the UK’s banks had taken inappropriate risks in the run-up to the crisis, and their managements and shareholders deserved much of the pain. RBS was over-trading, with a balance sheet that was grotesquely large relative to its true capital resources. HBOS’s assets included investments that could not, on any sensible regulatory criterion, be deemed safe and appropriate banking assets, and was insolvent. Barclays was better placed, but its senior executives could not make up their minds about how to mix commercial banking operations with the racier world of investment banking. Lloyds had been prudent by traditional banking standards, but it had sold its customers billions of pounds’ worth of payment protection insurance (PPI) policies that were later judged worthless and semi-fraudulent.

The banks had sinned and many of their top executives were the sinners-in-chief. Nevertheless, the key question for UK policy-makers throughout the crisis ought to have been, “What is in the nation’s best interests from now on?” The banks may have done silly things in the credit binge of the early and mid-noughties, but they had complied with regulations, paid taxes and on the whole obeyed the law. (The deplorable rigging of market benchmarks was not public information in October 2008, while a case is sometimes argued that the PPI policies were legitimate products.) RBS, Barclays, Lloyds and HBOS were entrenched in British banking, with their branch networks and settlement capability. Well-timed rights issues, management changes and astute handling ought over time to have restored them to health.