Re the Fed not being a Government entity. Isn't this just a way of getting round some clause in the US constitution? Accountants call it "substance over form". If it acts like an arm of the state then, effectively, it is one, whenever the shareholders register might say (something which is not widely known...). It is very difficult these days to make any definite distinction between the state and the private sector.

The UK Government legally owns half our banking system now, but what was the reality of the situation beforehand? I think is was, effectively, akin to a parent company with a load of subsidiaries whose debts it stood behind. The bosses of the subsidiaries were allowed to cream off most of the profits in exchange for running the system (into the ground as it turned out).

If we're going to have government backstopping banks (and I don't think we should), they might as well be honest about it and nationalise them all. The current system just benefits the bankers, i.e. the people who run banks, not those who own the shares or the tax payers who back stop them. We're such a long way from people depositing their gold with a goldsmith they knew and trusted...