If you want more evidence of the devastation wrought upon us by the bankers, the politicians and the regulators, then look at what crept out of the woodwork last week.
Barclays admitted that another £700m has been set aside to cover claims from customers for mis-selling payment protection insurance, taking its losses to £2bn, bringing total losses faced by the high street banks to £10bn.
Investors in RBS are preparing a £4bn lawsuit against the bank and the former management, including Fred Goodwin, which could blow another hole in RBS. In a separate move, the Treasury Select Committee published its report into the collapse of RBS that blames the Financial Services Authority for the disastrous take-over of ABN Amro as much as the management itself.
But the most devastating of all was the dramatic collapse in lending to businesses revealed in the latest figures from the Bank of England. The flow of loans to businesses shrank by £2.2bn in August and overall lending fell by 3.1 per cent in the past year. Small companies report that lending has got even worse over the past three months and that credit is drying up, fast. This is disastrous, as getting credit flowing to the UK's smaller companies is absolutely critical for economic growth and the single most important issue needed to get the country back on its feet.
And there's more to come. As Paul Tucker, the Bank of England's deputy governor, warned in his speech to the British Bankers' Association last week, the crisis could get a lot worse, particularly if the eurozone falls apart. He fears that new rules forcing banks to hold more capital as a buffer against future shocks may not be enough to prevent another bank from collapsing, and the rules are not calibrated for the "end of the world risks that are in the realms of probability".
Scary stuff. So the big question for the Bank and the Government is how are we to prevent more "too big to fail" banks from going bust and being rescued by the taxpayer, as well as ensuring they are fit for purpose and lending more to the real economy.
Mr Tucker, the favourite to take over as governor from Sir Mervyn King next year, answered the first part of the question by suggesting tougher rules on bankers' pay to prevent another buildup of risk in the system.
He backs proposals in the recent Liikanen report that call for a share of bonus awards to be in the debt that can be written down if a lender gets into difficulties. It's obvious that having bank executives exposed to instruments, whose value depends on the survival of their firm, would give them a healthy incentive to maintain a safe and sound bank.
As he puts it: "We may not be able to abolish the occasional waves of optimism that grip humanity and the tendency to excess they set off… But we can and must dampen their effects on the financial system and economy."
Mr Tucker is right. He was also right to say the new UK regime of twin peaks – the Financial Conduct Authority and the Prudential Regulation Authority – will not rely on getting the regulations exactly right. "That would be a fools' paradise. Whether we like it or not, firms will be able to find their way around any set of rules – complex or simple – if they are determined to do so."
Which is why it's surprising that he still supports the Government's plans to implement the Vickers proposals for ring-fencing – the separation between the retail and investment banking arms – of banks.
It's critical that the regulators get these new reforms right, as having a complete separation between retail and investment banking has to be the most effective way to get banks confident enough to start lending again.
Russian deal is not just a coup for BP, but 'closure' for Dudley
If Bob Dudley, the chief executive of BP, completes the sale of the oil giant's share of TNK-BP to Rosneft this weekend, the lanky American will have played a blinder.
Without doubt, this sale is a great deal for BP because it will receive cash of between $15bn (£9.4bn) and $20bn, but it will also get a 10-20 per cent stake in Rosneft, which now becomes the world's biggest oil producer.
The Rosneft deal will also be a remarkable coup for Dudley, personally. Four years ago the American – then chief executive of TNK-BP – was forced to flee Russia as tensions between BP and the three oligarchs who make up the AAR consortium that owns TNK, came to a head.
Relations between BP and AAR have been tempestuous ever since, so it's a relief that Rosneft is also buying out AAR's 50 per cent stake in TNK-BP for $28bn cash.
For Dudley, at least, there will be what's called "closure", or one hopes so. BP's board agreed the formal part of the offer from Rosneft on Friday afternoon but there are still details to be hammered out; the precise shareholdings and cash, for example, and who from BP will sit on Rosneft's board, Dudley and David Peattie, BP's head in Russia, are the most likely candidates.
BP's involvement with TNK may have been fractious but it's also been hugely profitable: it invested $8bn in the joint-venture but made back $19bn in dividends – cash which came in handy after the 2010 Deepwater Horizon rig explosion in the Gulf of Mexico.
As a significant shareholder in Rosneft, this is the start of another Russian adventure for BP, one that will take it deep into the Arctic where the Russians own so much more oil under the Barents Sea. This means that BP will be receiving dividends from Rosneft but also more exposure as a potential partner exploring these new reserves.
All being well, BP hopes to make its formal statement to the London Stock Exchange tomorrow, so expect the shares – up another 0.55p on Friday to 452.60p – to bounce back some more.Reuse content