When the government first stepped in to re-capitalise the banks as the financial system teetered on the brink of disaster in the autumn, I highlighted the failure to assert political control of the banks. Nothing was done, or seems to be contemplated, to back the huge public ownership of the banks with public control. This failure to connect ownership and control has come back to haunt the government in the row over the payment of bonuses.
The Prime Minister has looked weak and ineffectual in his increasingly pathetic pleas to the banks to abandon bonuses. The public believes it owns several of the banks - it does - and it thinks that with ownership should come a degree of control. Unfortunately, the government didn't make the same connection when it threw billions of pounds of taxpayers' money at the crisis-ridden sector and shows no sign of grasping the credibility gap that yawns ever wider as public anger over bonuses grows.
The banks that are now dependent on public money for survival should be answerable to Parliament. I stick to my view that the best mechanism for this would be a new select committee chaired by Vince Cable with real powers to hold the banks to account. Alongside side this there should be government-appointed directors on the banks' boards, not former bankers tainted by the years of mis-management that led up to the near collapse of the sector but genuinely independent directors empowered to hold the professionals to account.