"I agree that the banks have been regulated but in fairness I think the toy industry is was more closely regulated."
This is factually incorrect, banking is one of the most regulated markets in existence, and has been for the past century.
"I happen to sympathise with your laisse-fair approach to the markets and think the banking industry could fuction without any regulation at all, provided that there was no state intervention in the event of a failure. As we are unlikely ever to get to that situation, then tight regulation is essential and it has to be as global and as consistant as possible."
The issue is that regulators cannot know what the effects of the regulation they are putting in place are, so no amount of regulation can provide against failure, however all regulation does inhibit business practices.
A look at the history of major banking crises from the great depression to the present day shows that it has without fail been the result of government action in one form or another. The regulation isn't just ineffective, but actively harmful, so even if the government takes all or some of the risk, it will still do yet more harm by regulating.
Furthermore, we used to have a situation where failure was not taken on by the government, surely we should be able to return to that far superior situation, and argue for it.