Six months ago some observers were predicting the return to the US in some form of the Glass-Steagall Act, whose abolition in 1999 broke down the walls between investment banks and their stodgier deposit-taking cousins. Its disappearance has been blamed for some of the excesses that led to the current financial crisis.

Yesterday's financial white paper, which was the fruit of months of scrambled consultation between the administration of Barack Obama, US president, and industry representatives, embodies the art of what is politically possible. There was no hint of a return to a two-tiered banking system which some, including Paul Volcker, an adviser to Mr Obama and former chairman of the Federal Reserve, had recommended.

Nor was there any trace of the original plan to produce a drastic consolidation of banking regulators. Instead of six banking regulators, there will now be five – the Office of Thrift Supervision being the sacrificial lamb. But in their place, there will be a new consumer products regulator and a council of supervisors to oversee the Federal Reserve's new role as the systemic risk regulator.