There's more than a whiff of a certain totalitarianism here:

If you had told people in the City at the height of the financial crash in 2008 that it would take almost nine years for the first top bankers to face prosecution, few would have believed you. If you had then said that this first prosecution would relate to suspected fraud over one bank’s supposed attempt to avoid nationalisation – rather than the crash itself – the bankers involved in the crisis would have laughed in disbelief: surely, they aren’t going to let us get away with that?

But they did: the bankers who played a central role in the worst crash of the postwar era walked away with their fortunes and freedom intact. Even worse, the fundamentals of the system that made it possible were retained intact.

Jailing all the bankers would not doubt be terribly cathartic. But there is this little thing called the rule of law which we do rather strain mightily to observe. One part of this being that you only get jugged when you have been tried, and found guilty, of doing something which was a crime at the time you did it.

We're starting the process with those Barclay's folks right now. We've done that with people who manipulated Libor. But the bankers in general? What actually is the crime they should be charged with?

Getting it wrong? There but for the grace of God go near all of us. It's not even true that greed, high wages nor incompetence are crimes.

That is, the reason our jails are not packed with bankers is that bankers did not, in general, break the law.

So, the short answer as to why no top banker lost his (they are always men) fortune when their banks went bust and required bailouts or nationalisation? It’s politics. There was too little political capital and almost no political will among mainstream parties to break up the banks and make them small and simple again – let alone to take on the “top” bankers and at least take away the bonuses paid out to reward profits that in 2008 proved illusory.

Most bonuses were paid in stock, stock which plummeted in value. One report has Dick Fulds of Lehman losing $960 million in that manner. Hey, maybe that's not taking away enough money but it's most certainly taking away some, isn't it? 

Further, banks have indeed become smaller and safer, capital requirements are very much higher and so on. And the problem wasn't caused by the complexity of the system either. Northern Rock was a very uncomplicated mortgage lender, Lehman a pure investment bank, HBOS sank on the rock of mortgages again and so on.

It's not even true that small and simple saves banks - America's Depression experience shows that, as does the S&L problems of the 80s.

We have no problem at all with the idea that the system might usefully be reformed. But we do insist that we've got to analyse the problems properly first. The GFC was, properly, a wholesale bank run, an inherent weakness of fractional reserve banking, not something brought about by widespread criminality. Only if we grasp that can we possibly devise solutions.