In the heated aftermath of the financial crisis, an angry public decreedthat the big banks had got off lightly. They didnt get their pound of flesh, and I wish they had. Tougher actionat the time might have been kinderin the longer run.
It would certainly have been preferable to what we have today, death by a thousand tax hikes and financial penalties.
Banks that didnt need a bailout, such as Barclays (LSE: BARC) (NYSE: BCS.US) and HSBC Holdings (LSE: HSBA) (NYSE: HBC.US), are being punished as vigorously as Royal Bank of Scotland Group (LSE: RBS) and Lloyds Banking Group, which did.
HSBCs loose talk about quitting the UK as a result could turn into firm action if this continues.
The banking industry is heading for oblivion, and plenty of people would celebrate that, at least at first.
Barclays, HSBC, Lloyds and RBS have shelled out more than 42bn in the last five years, according to new research from Standard & Poors.
And they face another 19bn worth of conduct and litigation charges by the end of next year.
The PPI mis-selling scandal alone has cost the banks 26bn so far. The banks have also incurred fines for Libor rigging, swaps mis-selling, currency market fixing, money-laundering and even computer failures.
Top dividend investor Neil Woodford has already warned where all this will lead. He sold his stake in HSBC in September 2014 over fears that unquantifiable regulatory fines could eat away at its dividend.
And that isnt the only way the authorities are out to get the big banks. They have backed the rise of the challengers such as Tesco, Metro Bank, M&S, TSB and Virgin Money.
Some 1.75m people have changedbank since the current account switch service was launched in September 2013, and the numbers are rising steadily.
Barclays has been the biggest loser over the last 12 months, with a net loss of 31,331 customers.
NatWest/RBS has lost more than 30,000 customers, HSBC and Lloyds have each lost more than 10,000.
The banks are losing their captive audience.
No Way To Live
Im not saying regulators are wrong. The fetid swamp of banking practices needs to be cleaned up. Greater competition is required.
But you also have to understand what you are investing in. The big banks are marked men.
The worst may be over, with S&P suggesting that fine inflation may subside, asclaims for PPI and swap mis-selling pass their peak.
It says2015 maybe the last big year for banking litigation, but also concluded that conduct and litigation charges are now a way of life for the UK banking industry. Investors in the big banks mustexpect thatsome form of charge is probable every year.
And you need to include that in your calculations.