Punishing the bankers who brought on the financial crisis has proved distressingly difficult. None have gone to jail. A few young traders, who hid their post-crash losses and thereby stole from the banks, are behind bars. The rest are untouched by the tragedy.

It's true that a handful fall into the category of "disgraced banker", such as Barclays' former boss Bob Diamond and Edinburgh's finest, Fred "the shred" Goodwin of Royal Bank of Scotland fame, but they kept their wealth and pensions and live comfortably.

Worse are the mealy mouthed explanations we get from our politicians, who seem to think that talking about punishments is the same as making them happen.

Vince Cable, George Osborne and Ed Balls are all the same on this score. They give speeches about dishing out heavy fines and new regulatory rules, but cannot help prefacing their remarks with their concerns about the need for a strong financial sector, as Osborne did in a speech earlier this week.

They want competition, but are too scared to break up the big four high-street banks. They want lending to increase, but refuse to take control of the nationalised banks and direct them to lend. They want bonuses to come down, but fail to instruct the bank bosses to cut them, preferring to shave them with a bit of tax, or in Osborne's case, encourage them to pay fines from the bonus pool.

The debate in the US is more honest. Like the UK, the US authorities have only jailed the most extreme cases, such as Ponzi-schemers Bernard Madoff and Allen Stanford. Not a single financial executive or Wall Street firm has faced prosecution in a criminal case for contributing to the financial crisis.

Tim Geithner, Osborne's opposite number in Washington, is not in charge of prosecutions, but he has made it his job to explain why bankers have avoided the courtroom. In short, the Bush and Obama administrations put the recovery before reform of Wall Street. Geithner stuffed the banks with government cash during the credit crunch, even when they didn't want it, to get them back on their feet and lending again. There are no taxes on bankers. The White House let Congress devise a complicated and ineffectual set of new banking regulations. He doesn't wring his hands about the lack of prosecutions.

He recently told the Wall Street Journal: "A huge part of what happened across the system was just a mixture of ignorance and greed, or hope over experience, and not illegal. Most financial crises are not caused by fraud or abuse. They're caused by people taking on risks they don't understand, too much risk. When the tide turns, it can have catastrophic damage."

Geithner's plan is the wrong one. Sure he got the US economy back up and running quickly. But he has put in place all the building blocks of the next crash, with powerful banks at its heart. Yet, it is an honest endeavour, to create jobs and growth now while bypassing the banker issue, which is more than Osborne can say.