The banking sector needs keeping in line

The credit crunch has not ended since I talked about it a few weeks ago, so I feel safe coming back to it. In the past few weeks, we have had major UK banks report figures that range from shocking in the case of Alliance & Leicester, to poor from Lloyds TSB, to more than decent from HSBC.

They have all been scrabbling around to shore up their balance sheets, which range from giving up the ghost to the embarrassing efforts of some rights issues, to the easy (and sensible) option Barclays took when it sold a chunk of itself to a rich foreign owner. There seems to be unwritten feeling that all this public pain the banks have shared with us makes up for the big mistake. What is this big mistake? It has nothing to do with buying up chunks of sub-prime debt or creating it in the first place. That would be letting them off too easily, because frankly the expression 'sub-prime' ...