For a start of your talking retail banking rather than trading banking?

All deposits were guaranteed up to £25k which is now £100k. Why the hell would a high street bank profit from cutting of ATM or chip and pin? Do you know how much merchant fees are!

Quite the opposite they do everything they can to make people spend more. Granted they aren't lending money as easily as they used too, but that was what created the mess we were in before.

They wouldn't have profited - if they hadn't been bailed out they wouldn't be operating at all (RBS was within 2 hours of closing up shop entirely).

Read Alistair Darling's autobiography for his account of the near disaster - it's really rather alarming to read.

I think you're a little bit confused between retail and commercial banking. It was the latter which was bailed out, not the former. A collapse in it wouldn't have stopped ATMs working, but would have quite likely had dire consequences for the global economy and businesses, simple things like an airline hedging their fuel price would have suddenly turned into an airline losing their money (depending on the product bought it might just be a premium or a the whole lot). In that one simple example imagine the main airlines going bust, owing all the money for previously sold tickets etc. That is the kind of doomsday disaster a collapse of commercial banking could have lead too.

The ATMs would still be there, there just might be no cash in them due to hyperinflation and lack of consumer confidence. However the retail banks would do all they could to keep operating.

As for reading Alistair Darling's autobiography, I don't really get why I would, the guy didn't really get round to doing anything, but had been a cheerleader for the team that deregulated much of the commercial banking industry. People forget that all Thatcher did was to open it up to people outside of Eton, Brown's light touch and continued deregulation helped encourage it to grow and grow.

If he says that the Government was worried that a collapse of RBS, HBOS and others might have led to the banking system ceasing to function in the UK then I'm inclined to believe him.

Wait, so you're saying that at any time the bankers could have flipped a switch and magically the economy turns back on in a matter of seconds?

So no, we were not being held hostage.

They were greedy and incompetent and we let them do it. No holding hostage. No extortion. No protection rackets. Greed and incompetence and lack of oversight and deregulation.

I know they weren't literally gangsters - and as you say, we let them do it.