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  Andy - it is easy to overplay this problem.
  
  The reason this occurred was entirely down to the changes brought in by Brown in 1997.
  
  Until then the Bank of England had oversight of the banks in a very tough regime. A friend of mine was a bank chief exec back then and is appalled at what has happened since he retired. He told me that he had to go to the Bank of England prior to 1997 every three months with his top management team to spend a day being grilled about every aspect of his banking operations. If the BoE did not like what they were doing they had the powers to stop them. That stopped after 1997.
  
  All that changed thanks to reforms brought in by Brown in 1997. He established the FSA, gave the BoE control over interest rates but removed from them their oversight functions of the banks, that was handed over to the FSA 'super-regulator'. They introduced 'light touch' regulation of the banks, on the personal urging and encouragement of Brown (Mansion House speech.... being one famous instance). These quarterly meeting were stopped and the banks were free to act commercially, the problem is that commercial freedom bit them as soon as the boom times slowed down.
  
  As for the Leeson type chappie - sadly there is always a risk of a rogue dealer. It is difficult to stop that though investment companies did have to tighten up their oversight as a result of Leeson.
  
  The problem we had was a systematic failure of regulation - not some rogue let loose (unless you regard Brown as that rogue, I do...)
  
  Dont forget as well that not all banks got involved in the dodgy dealing though most did get caught up in the backlash. Lloyds TSB only needed bail-out cash because they had taken over HBOS on Brown's urging. Barclays did not seek taxpayer bail-out and HSBC did not get too entangled in the problems at all. RBS were the big culprits, along with HBOS and N.Rock (though the latter were a different kind of problem). The RBS boss was the new dynamic banking boss who despised the 'safe' approach taken by the Lloyds and HSBC chiefs....so much for Fred the Shred, who was at the forefront of encouraging Brown's lack of foresight.
  
  Even Mrs T refused to let the banks off the leash.

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