A fortnight ago today long queues formed outside Northern Rock branches across the country, shares in that company crashed in value and the banking system seemed to be on the edge of a crisis of confidence. The pledge issued by Alistair Darling, the Chancellor, that the Treasury would stand by the savings deposited at Northern Rock proved sufficient to reassure investors and the stampede disappeared as fast as it had materialised. The only losers from the saga, it seemed, were the poor souls who held shares in Northern Rock and could not sell them fast enough. This was brutal but is an example of capitalism succeeding rather than failing. If the polls are to be believed, ministers emerged with some credit from the episode. Yet it would be complacent to assume that this is the end of the story. The banking sector requires fundamental reform if it is to avoid further bouts of chronic turbulence.

In fairness, Mr Darling will acknowledge this in a speech today. He will bring to an end the anomaly by which the first £2,000 of savings are fully protected but only 90 per cent of the £33,000 after that. The full £35,000 figure will now be honoured because of a change in the financial services compensation scheme which is funded by the industry. This will be a “first step” before more sweeping measures are put before Parliament (although when that moment comes will depend on the timing of a general election).

A first and not a final step it must be. While the move is welcome in itself, it is not enough to make all those with savings safer. There are many middle-class pensioners, among others, who will have worked hard to save more than the £35,000 ceiling. Mr Darling needs to consult on introducing a much higher total (£100,000) for an insurance programme that would underwrite larger sums. It is inevitable that a more rigorous approach would require the banks to divert more of their resources to it. They might find that their seemingly excessive overdraft charges were more defensible if they could demonstrate that money raised by such means was being deployed to provide US-style banking protection. It would be far better for the sector to come forward with an impressive package of its own than to oblige the Chancellor to be more involved in the details than he should be.

Mr Darling must not, though, be unduly pious in allocating blame for what has happened. He will be at pains this morning to stress the “international risks” which created the difficulties that engulfed Northern Rock at the beginning of September. While it is true that the credit crunch which caught this institution out was triggered by severe concerns about the American mortgage market, to argue that there was no domestic element involved would be illusory. Northern Rock developed a business model which would leave it exposed if credit dried up and those who regulate this market allowed it to do so.

Shoring up savings is only one half of the agenda required. Mr Darling has to end the ambiguity between the roles of the Treasury, the Bank of England and the Financial Services Authority that was so badly exposed on Rocky Monday. He has to do this in a fashion that does not undermine the Bank of England’s independence, directly or through a whispering campaign against the present Governor. This is a difficult balancing act. That is no excuse for not addressing it.