I got water in my ear when I went swimming last weekend, so couldn't understand why everyone was so excited at banking being "rationalised", which seemed a good idea to me. Simple statements, better lines of communications… yes, I thought, a welcome development.

It was only when my ear popped I realised they were being "nationalised" rather than "rationalised". But even then I decided I hadn't missed all that much. Nationalisation, rationalisation: it'll amount to the same thing.

Clearly the plan is to sack legions of staff, push up prices and ditch awkward customers so the banks can return to profitability and the private sector as soon as possible. That's the plan, but will they be able to pull it off?

Almost certainly not, if history is any guide. Yes, I know the Government has run Northern Rock ruthlessly, but the Rock was a high-risk lender whose borrowers, in the public perception, had only themselves to blame.

Getting away with stamping its jackboots over half of all UK mortgage borrowers, and millions of customers who now insure their homes and cars with Brown & Darling plc, will be quite another matter.

The miners rejoiced when the pits were nationalised in the 1940s, as did rail workers. Yet nationalisation has a tendency to destroy whole industries and most of the jobs therein.

When it comes to banking, there has always been an irreconcilable conflict at the heart of the relationship between the owners of the business and its customers. The owners wish to make profits from lending us money and insuring our needs, while we're determined to stop them.

The only bank account we want is free for life and comes with a credit card which pays us to borrow and spend.

Now we're both owners and customers, what's going to give? Imagine the scenes in branches up and down Britain. A customer is refused a loan. "How dare you," he shouts at the member of staff. "I own this business and if it wasn't for me you would be out of a job."

He takes his complaint to his local Member of Parliament or MSP, joining a long queue complaining about mortgages, credit cards and insurance.

With a small majority, and fed up with the barrage of angry constituents at weekly surgeries moaning about the banks, the right honourable launches a debate in the house calling for new practices to ensure his constituent gets his loan, another is not repossessed and a third has his traffic accident claim paid in full.

Profits? The banks might as well whistle for them.

The Government has pledged its intention of returning them to private ownership as soon as possible. But don't believe a word of it. After all, we were told repeatedly we had the best-capitalised banks in the world. Well, they couldn't have been, could they?

Dividend divvies

LYING I can forgive the Government, but stupidity is harder to swallow, and here I am referring to the disastrous decision to prevent the banks from paying dividends. Talk about cutting off your nose to spite your face.

Do they not realise that pension funds are stuffed full of banking shares, bought specifically because they provided a strong income stream to meet regular pension payments through the dividends?

Robbing them of these dividends could be as serious a blow as Gordon Brown's ill-judged tax raid when he removed Advance Corporation Tax. Many more will be forced back onto state help in old age.

Worse still, pension funds will start falling like cards. If you are hoping for a final salary pension, be very afraid.

Funny money

THERE have been precious few laughs over the past week, so we must make the most of those that come along. I know it's cruel, but I couldn't resist a chuckle when I read that motoring supremo Jeremy Clarkson was so worried about his money that, on the advice of his banker, he transferred his life savings out of UBS and into an AIG bond. Yes, that's the one where 9,000 investors last week discovered their money is effectively frozen for nearly four years.

Which means that neither all that money nor JC will be going anywhere very fast in a hurry.

Nearly as funny was the news that Oxford University has lost £30m after investing in three Icelandic banks. It must be the size of those huge brains that makes them so clever. It's even more thigh-slappingly hilarious when you remember that some of the dons at Oxford sacked their fund managers because they were convinced they could do a better job themselves.

But the prize for the best side-splitting joke goes to the call by the new chairman of the Financial Services Authority, Lord Adair Turner, for better regulation of the banks. He says he's going to employ more regulators and pay them squillions.

We already have thousands more regulators than ever, and yet we have landed in the biggest mess of all time. If we are looking for radical solutions, I suggest we sack them all, dismantle the FSA and tell companies they can keep the billions they squander annually on compliance.

What's the worst that can happen? The odd bank will go bust, like they always have. Better by far than nationalising half the economy.