exactly how is the bank of England going to stop the rise in food prices?

Raise interest rates is one, and unwinding QE is the other. Banks have been speculating in food especially for the last three years.

I agree with the risks of political meddling but what we are doing by giving the shares away is missing an opportunity to break the bank up. Sell off its investment banking arm and break the rest of the bank up, into smaller banks. Then the government would be able to either sell off each of the banks over time. This would increase competition to banking overall and set as a warning to other banks to avoid getting into such a state that the government has to rescue them.

You agree with the risks of political meddling, but rue a missed opportunity to meddle for political purposes.

Virtually any form of regulation could be described as 'political meddling', since it is lawmakers (almost inevitably politicians) constraining and defining the behaviour of business. The trick is to distinguish between necessary and un-necessary meddling. With recent events I think it's hard to argue that politically imposed deliniation between consumer banking and investment banking is anything other than necessary meddling - the population as a whole should not be exposed to risk they have no means of mitigating, when all they want is a useful service that society would struggle without.

There is a certain type of executive who believes any sort of constraint or restriction at all is unnecessary, as the creation of profit by definition validates their behaviour. You might describe it as 'unelightened capitalism'. The function of political meddling is to limit the damage people like that can potentially do to the rest of society.

I'm not sure I see the entire remit behind what Am is suggesting but I do think there is an issue with institutions that are 'too big to fail' but which are free to operate irresponsibly. This is the situation we found ourselves in as a nation and it cannot be allowed to be repeated. Therefore, some enforced segmentation of the banking industry seems necessary. It's not as if doing so is unprecedented - in the most capitalist country on earth, AT&T was broken up because it was seen to be too large and had become, essentially, too important and too dominant.

What I'd most like to see is a resurgence of the building society concept. I'm not entirely sure how likely that is, although the remaining building societies have reported increased demand for their services since the true banking sector tripped over it's own toes.

It is hardly political meddling. If banks are too big to fail, to big to gaol, then they are too big. The reason that Iceland failed to bail out its banks were that they would have lead iceland down the same mistakes as Ireland. Iceland is now growing while Ireland is still exacting austerity on its citizens. To avoid breaking them up is a sign of corruption. If this were another industry there would be a public enquiry and they would be broken up. There is no need to define what business they do, just their size. It could be left to the management of the bank to decide how they want to be broken up, be that regional banks or each in every region to provide services to customers, or by function such as trade finance or factoring. Customers could then decide which bank that they want to be in. This not telling banks that they should be lending to such and such industry or even the level of lending.

Governments have oversight of whole industries through regulators and laws. That's enough. The government shouldn't wield its shareholding any single company as an additional form of control for the reasons I outlined above.

There's no value in conflating the roles of lawmaker, regulator and shareholder. Be one thing at a time, give the other job to other people.

Fine then get a regulator that will do its job. The banks are too big and offer nice cushy jobs for helpful ex regulators.

I couldn't agree more with that statement. It's just the idea that we should fiddle with RBS using our collective shareholding rather than using proper regulation to control the industry and through that the bank that I disagree with.

I can see that. The problem is that banks are too big and simply giving its shares away does not mean that it will be better run. The government have been very hands off and yet the bank is closing down some aspects of its business but it will still be too big to rescue if there were another crisis. If so called a free market government are faced with this again they will screw the taxpayer over again to bail out a failed bank. If they were all much smaller then any risk to the tax payer would be minimal. They could simply be allowed to collapse. Depositors would be protected but no need for bailouts.