So it's the end of the banking world as we know it, and the western world is collapsing, yada yada. One of the things I'm noticing, is that all these banks and financial institutions like Fannie May, Freddie Mac, AIG, Northen Rock etc, keep getting saved by the their respective governments (the US and UK) because they're "too big" to let fall, and too many people - and other institutions - are dependant on them. Here in the UK, the Government are allowing two of our biggest banks, Lloyds TSB and HBOS (the company behind Halifax and Bank of Scotland) to merge, to head off the impending collapse of HBOS - again because HBOS is already too big to allow it to fail. In doing this, they're allowing a new banking group of collosal size to be created - "Lloyds Halifax" (for want of a better name) will end up with around a third of all the business on the high street - but all the normal, sensible competition laws that would prohibit such a price-setting monopoly against the public interest are being formally set aside, "in the public interest".

So we have a situation here where the solution to one big bank in trouble, is to make it bigger... and the solution when even bigger banks are in trouble, is to nationalise them, effectively making them as big as they possibly can be and putting literally everyone's money at stake in them. Which is an interesting state of affairs. Presumably when Lloyds Halifax find themselves in trouble they'll be nationalised, or allowed to merge with something even bigger? Are we going to get to the point where there's one single bank on the high street, that simply owns the whole world, and if so, which government will nationalise it when that goes under?

I can't help thinking this all needs dismantling and starting again. It all seemed a lot simpler when there were just lots of littler banks all competing for our money, and none of them were individually quite so powerful, or quite so important to the economy. Perhaps it would have been better to nationalise a few more of these banking monsters, and then split them up a bit? Turn a few back into the useful building societies they began as, separate Lloyds from TSB, Halifax from Bank of Scotland, give them all just enough public protection to ride out the downturn... that might really be in the public interest. Just a thought.