If Banks are so critical, why can they do anything?

A breaking news story came up on the Irish Times. Apparently some more non-standard measures are being considered to deal with the current recession.

They are going to keep in mind "key role the banking system plays in the region".

The question that spring to mind is: If the banking system plays so key a role, why is it so poorly regulated?

The banking system is important, I get that. If it's the cornerstone of economies, but we want to avoid socailising the system, then in my mind, the only other option is tight regulation. Tight to the point of regulation the outlines what they can do, and if the regulations don't explicitly state a power the banks have, it is assumed they don't have it.

This would move us away from the current mess where poor regulation allowed loopholes to appear that were immediately and dramatically exploited by the banks, and here we are.

Don't get me wrong, I have a strong capitalist streak, but I'm not a moron either, there are areas of society that are and should be socialised, if the banking system is so critical to our survival as a modern society, maybe it needs to be socialised too.

It's been done before, and I'm sure at each step along the way it was thought to be crazy, and 'against the grain', but here we are.

A list (off the top of my head, in two minutes) of 'socialised elements of society':

• The road system - signs, lights, power for the lights, etc... (I'm strongly against toll roads - this is a move away from socialising the transport system, are we going full circle?)
• Paths/pavements - we can all walk for free
• Healthcare - I won't get into the problems with it though!
• Unemployment - benefits and the dole
• Education
• Books - libraries have free books