Anniversaries are a time for reflection and, as the third anniversary of the credit crunch approaches, I have been doing some reflecting on where I went wrong as an economist. My own errors, of course, are of particular interest only to me, but I fear that they are fairly representative of the economics profession.

To soften the blow, I have also been thinking about where I didn't go wrong. I still believe that government interventions tend to be clumsy; I still believe that markets usually provide good solutions to economic problems; and I still believe that people tend to respond rationally to incentives. I may be wrong about all of these things, but not because the banking crisis has demonstrated that they are false.

The near-collapse of the banking system demonstrated that governments are indispensable – but indispensable klutzes nonetheless. The various interventions were botched, unduly expensive, late and ill-suited to preventing a future crisis. But this is not surprising: all government interventions are designed by people with limited knowledge of conditions on the ground, tend to be one-size-fits-all, and are inevitably compromises between the public good, the knee-jerk bias of an ill-informed electorate and some formidable lobbyists. I am still profoundly grateful that governments did something rather than nothing.