September 15 not only marks 78 years since the climax of the Battle of Britain but also the tenth anniversary of the failure of Lehman brothers in the US. Both were important events for our country and, subsequently, for the history of our world.

The US authorities did not bail out Lehman Brothers, perhaps because they had even larger fish to fry as they contemplated what to do about Washington Mutual (which failed ten days later) and AIG, a large insurer with plenty of credit default swap exposure that threatened large US investment banks, which was subsequently bailed out. But, unlike Lehman's, other failing banks in the US and Europe were bailed out, which led to a political commitment from G-7 leaders that ?never again? should failing banks be rescued by the taxpayer.

As a result, the Basel Committee on Banking Supervision introduced sweeping changes to the prudential regulation of banks in the Basel III reforms, the last subset of which were finalised in December.

Banks now have to hold much more, higher-quality capital resources to protect them and their depositors from the losses that arise if borrowers default on loans they have made. British banks have raised an extra £100 billion of ?Tier 1? capital since 2007, making them three times stronger than they were then. And the amount of the most loss absorbing ?core equity tier one? capital banks are required to hold has increased tenfold.

The extent to which large banks can use their own assessment of credit riskiness has also been limited, with the result that capital requirements for a greater range of loan types are determined by the regulator rather than the bank itself, reducing the perception, held by some, that banks were ?marking their own homework?. This reduction in the risk weighting discretion has been supplemented by a backstop leverage ratio which, for UK banks, has doubled in strength since the financial crisis.

During the GFC some banks maintained their minimum capital ratios by reducing lending to more capital hungry loan types, which can have a knock-on effect on economic activity.

Counter-cyclical capital buffers, over and above minimum capital requirements, have been introduced. These are built up in times of strong economic growth and have the effect of reining in over-exuberant lending growth. In times of economic downturn banks are able to drawdown these reserves, enabling them to continue to lend to support economic activity.

Banks now hold twice as many high-quality liquid assets (HQLA), such as government bonds, as they did at the start of the financial crisis. HQLAs can be used by banks to raise cash if depositors lose confidence in the bank, making them much more resilient to bank ?runs?. Other liquidity requirements mean that they are much less dependent on short-term funding than they were, so that long-term loans are now more closely matched with longer-term funding.

All these changes mean that the global banking system should now be able to withstand losses of a similar extent to those that were triggered ten years ago. But of course it is most unlikely that future economic shocks will repeat the global financial crisis, which is why banks and regulators must learn from and re-assess the lessons of history, just as the leaders of the Royal Airforce did nearly 80 years ago during 'their finest hour?.