Should HBOS have been rescued in 2008 and not Lloyds?

Eight years after emergency bailouts that propped up two punch-drunk boxers and stopped them falling to the canvas, one of them can now be left to its own devices.

While RBS still lingers in the blue corner, Lloyds is off the Government books .

Most people would say that's a good thing. Successive chancellors, from both sides of the political divide, have agreed that it isn't the long-term job of governments to run banks.

That's why they started selling off that stake in Lloyds as soon as the bank was showing signs of recovery.

And by any standards, Lloyds has recovered. These days it's a smaller, more focused and much less risky bank, an institution that has reinvented and stabilised itself.

That transformation hasn't come without pain. Most obviously, 57,000 people have lost their jobs along the way while the sins of the past have also seen it pay out around £17bn in compensation for PPI mis-selling.

But the fear that, hobbled by the fated merger with HBOS, it was on the point of collapse, well that's now just a distant memory.

The question of whether we - the nation - have made a profit on our £20.3bn investment is tempting, but moot.

For one thing you can dance around all day discussing the way we could even answer the question - are dividends profit, for instance, and how much has the Treasury had to pay over the years to borrow all that money?

But really, none of this is the main point. In the great scheme of Government spending, the profit we might have made will end up to be little more than a rounding error, but the story of what happened is important.

Because the whole point of throwing this money into Lloyds was not about an investment, but about a rescue. About dealing with a situation that, hopefully, comes along once in a lifetime.

The background is well known. A global swirl of sub-prime mortgages, complex derivatives, overambitious deals and shoddy regulation had pumped up the banking world, only for the air to start billowing out.

Loans suddenly weren't being repaid, assets tumbled in value and banks found themselves on the brink of bankruptcy.

A problem became a crisis, and then headed towards becoming an economic and social disaster.

Britain had two big headaches - RBS (LSE: RBS.L - news) and the Lloyds Banking Group.

RBS had grown voraciously, not least through a startlingly expensive takeover of the Dutch bank ABN Amro.

Lloyds, reportedly under pressure from the-then Government, had taken over HBOS, itself lumbered with a raft of troubled loans and looming losses. Both banks were now creaking, like splintered trees struggling to survive a storm.

If either had gone bankrupt, there was a genuine fear that Britain's entire financial system could stop working.

Back in 2008, five days after the collapse of Lehman Brothers, Adair Turner was appointed the chairman of the Financial Services Authority (FSA).

As the country's leading financial regulator, he suddenly found himself immersed in the extraordinary debate about what the Government should do to prop up Britain's banks.

What it did was to pump huge sums into both RBS and Lloyds, to give them the money they needed to cope. In return, the Government took big stakes in both banks - peaking at 43% in Lloyds and more than 80% of RBS.

Eight years later, Lord Turner remembers it as a set of "historic decisions" and told me: "It's good that Lloyds has been put back into a good enough shape that the Government has been able to sell its stake."

But did the Government do the right thing? If bankers caused the financial crisis, wouldn't it have been better to have let them fall over?

"When you ask, 'should we just have allowed those banks go bankrupt?' I know people like that, and it feels like the macho thing to do," said Lord Turner.

"But I think that would have been catastrophic. I think it would have led to a far deeper recession, far more harmful to ordinary people, to employment, to prosperity, than even the recession that did occur.

"But there is a legitimate debate as to whether we were brutal enough. You might wonder where we should simply have nationalised them?

"The merger between Lloyds and HBOS was engineered two days before I took over at the FSA, and I think there's not a daft argument it would have been better to just renationalise HBOS, which was the problem.

"Lloyds wasn't the problem. Lloyds, like all banks, had some problems, but it wasn't a bank that was threatened. In the general scheme of things across the British banks, it and HSBC had been the better run banks, compared with HBOS and RBS."

It is a fascinating insight into the world that could have been - a world where the Government had never owned a chunk of Lloyds, but did own all of HBOS.

And it's an echo of those remarkable, turbulent times that still shape so much of what we think of the global economy.

"The entire plumbing of the global interbank market had seized up," said Lord Turner, and he was right.

Lloyds can now move on from those dark days; for RBS, still sitting firmly in the Government's books, that prospect is a long way off.