I feel as though I am pissing into the wind (again, as usual in this forum) in attempting to correct a huge misconception:
Banks did not “cause” the recent and ongoing economic meltdown. Banks are not ‘sociopaths’ (nor are they run by more sociopaths, in general, than exist throughout society in every occupation).
Subprime mortgages, various derivatives plays and hedges and many of the other instruments that failed were not (or at least, in the overwhelming majority not) swindles. “Bad business” does not equate to crime.
The debt instruments (mortgages) – and the rules under which they were issued, guaranteed, collateralized and traded after the initial issue – are very highly regulated by the government. If there is evidence of criminal activity then that should be investigated and thoroughly prosecuted.
The problem with the “economic meltdown” is that the rules were so deeply flawed that the financial institutions relying too much on them (and not enough on their own good business sense) built a house of cards with debt that ultimately became unsupportable. Banks were just the ones holding the bag. A public policy decision was made to not allow all of the banks to fail that had been caught short (which would have led to a more general collapse in the economy, as well), and so money was lent to banks and to other financial institutions (such as GM, for example) that had huge financial exposure. (I believe that GMAC is now bigger than GM’s manufacturing business, as GE’s has been for many years.)
Personally, I think that the whole thing should have crashed. I expect that our economic recovery would be well underway by now if it had, and the banks that played too close to “government rules that they knew were idiotic” (such as the idea of making “interest only” loans to people who could barely even afford the interest on the loans) should be permanently out of business.