Recent exchanges between bankers and lawmakers in Britain and the United States show that the bankers are still riding high and resisting any attempts to cut them down to size. It is a far cry from what happened centuries ago, when bankers routinely lost their fortunes when they dared to tangle or even to tango with the state. British members of parliament did at least try to get some information from Bob Diamond, freshly resigned chief executive of Barclays, about a bid-rigging for which the big British bank paid a record GBP290 million (HK$3.48 billion) fine to British and US authorities. But Diamond played the MPs: he called each member on the committee by their personal names, Jesse and John and Andrea, like old family retainers, and spoke patronisingly as if they were. Diamond conceded that banking behaviour was 'reprehensible' but wriggled away from personal responsibility, claiming the bid-rigging was done by 14 traders and their 'immediate supervisor' and that he knew about 'the full extent' of the rigging only a month ago and had spent GBP100 million immediately to investigate it. He rebuffed the idea of handing over his golden farewell, estimated at up to GBP22 million. But he has since done a deal with Barclays on a roughly GBP2 million pay-off - equivalent to about a year's salary - forgoing the bonuses that would have taken his farewell package to about GBP20 million. Public opinion evidently counts. The British MPs, however, looked like lions with their claws sharpened and ready for a tasty meal when compared to their US Senate counterparts who questioned Jamie Dimon, chief executive of JPMorgan Chase. One of the senators cooed to him: 'Mr Dimon, it occurs to me that an enterprise as big and powerful as yours, you've got a lot of firepower and you're - you're just huge.' Another joined the love-in: 'You're obviously renowned, rightfully so, I think, as being one of the best CEOs in the country.' A third gushingly told Dimon: 'You guys know the industry better than anybody sitting up here.' Indeed, the tables were turned so ridiculously that Dimon was arguing for support of financial reforms such as the Dodd-Frank Act, and the senators were suggesting that the banksters be freed from any restrictions. Fatuous commentators have tried to make light of the issue of bid-rigging over the London interbank offered rate (Libor, Lie-bor or Lie-more, as angry critics of the banksters call it), claiming no one was hurt and few suffered material damage. On the latter point, watch the progress of the billions of dollars of claims. Libor directly governs the rates charged daily on US$10 trillion of mortgages, loans and credit card rates and is also the rate against which up to US$800 trillion of derivatives are set. Even if no one was hurt, there is a key question of trust. The banksters have betrayed public trust. As Martin Wolf of the Financial Times put it: 'Banks, as presently constituted and managed, cannot be trusted to perform any publicly important function, against the perceived interests of their staff. Today's banks represent the incarnation of profit-seeking behaviour taken to its logical limits, in which the only question asked by senior staff is not what is their duty ... but what can they get away with.' That is - or should be, have our moral sensitivities slipped so far - damning enough. Bankers were supposed to be paragons of virtue, able, with lawyers and priests, to countersign important documents because their word was their bond. In the bad old Dark Ages, bankers supported kings and took risks. As Professor Michael Hudson recounts in a thoughtful essay, in 1307, Philip IV of France, also known as 'The Fair', seized the wealth of the Knights Templars and put many of them to death, not on financial charges but claiming devil worship and satanic sexual practices. Later, the Peruzzi and Bardi banks went bust for unsecured loans to England's Edward III. In the classic era of modern banking, bankers took deposits and lent them, paying depositors less than they charged for loans. But, as Hudson says, the risks were borne by the bankers, not the depositors or the government. These days, the FIRE sector - meaning financial institutions, insurance and real estate - are banks' main clients. Hudson charges: 'Bank loans are ... made to speculators in recklessly large amounts for in-and-out trading. Financial crashes have become deeper and affect a wider swathe of the population as debt pyramiding has soared and credit quality plunged into the toxic category of 'liars' loans'.' Just how out of hand banking shenanigans have got is shown in the so-called hedging losses in the JPMorgan trades. The New York Times, citing 'people who have been briefed on the situation', reported that the losses 'could reach as high as US$8 billion to US$9 billion', not the mere - mere? - US$2 billion that Dimon originally admitted to. There is no way that this was some small topiary event or hedge. It was a highly speculative gamble, something that too-big-to-fail banks should not be doing with the prospect that they may be protected by public money. It is important to protect the public, and the public purse, from banksters' speculation. Governments should at least ring-fence commercial banking and depositors' money - which they should guarantee - from investment banking, which banks must be left to do at their own peril, and governments should let them go if they gamble and lose.