“Of course, if the banks can prove fraud (for cheques or for the e-equivalents) then the end-user is liable (and should be locked up).”

Any law should tkae the basic idea behind contract law into accout (ie equity of exchange).

So if a customer can show the actions by the bank where the equivalent of fraud (irespective of deliberate or accidental) then the customer should expect to see an equivalent punishment met by the bank.

That is if a responsable person can be found then they must face a jail term equivalent of if the fraud was deliberate. Or the bank should make payment to the customer equivalent to that the most highly renumerated member of the bank would receive during the equivalent imprisonment term.

Obviously this payment would include all bounus, perks, pension and other direct or indirect renumeration the bank member would receive.

Further the customer should be able to chose between direct monetry payment or an equivalent equity payment at the most favourable rate given to a bank employee.

That is if the financial payment would be 1million, and a member of staff through share options etc could obtain the shares at 10% of face value then the customer should be able to get 10million in equity.

This sort of penalisation would have two moderating effects on banks.

The first would stop them building shody systems where the bank has externalised their risk via the banking code and Chip-n-Spin etc and as a consiquence currently have no need to be duly diligant.

The second is that it would also encorage the bank to either moderate their renumeration packages or use better oversight.

Unfortunatly benifficial as it might be I cannot in all honesty see any politician walking into the appropriate lobby on it come voting time 8(

Oh and the law would need to be applied such that it applied to any bank taking money from a british person, and the employee used to calculate the equivalent renumeration is open in that it could be any part of the organisation group or affiliate in any part of the world.

Otherwise the banks would simply structure their operations to minimise liability…