In the immediate wake of what was initially dubbed the credit crunch, a large number of people vouchsafed the idea that it had been "everyone's fault". We'd all partied wildly through the boom, apparently, racking up debt like there was no tomorrow, and completely forgetting that we'd eventually wake up with a terrible hangover. Naughty.

Five years on, and not much has changed, beyond nomenclature. Credit crunch became credit crash, and as the latter title proved to be not quite doom-laden enough, consensus gradually settled around Global Financial Crisis. This, too, is an inaccurate term. A crisis is a turning point, for better or for worse, determining a future course of events. Certainly, the failure of international banking provoked a crisis. The crisis, however, has not been in finance. It has been in politics, particularly in public spending. Global Governmental Crisis would be a more apposite title for this ongoing chaos. And the political chaos is simply a consequence of political failure to fully acknowledge what went wrong with banking, and determinedly set about fixing it.

Much lip service is paid to the idea that over many years in Britain there has not been enough investment in manufacturing. What is overlooked is that one sector did a gargantuan amount of manufacturing during this period. The big international banks manufactured money, using very simple raw materials. All they needed were computers and borrowers. Every time they made a loan, the banks simply typed the amount they were lending into their computer system, transferred it to their victim's account, and charged interest for the privilege. The late media entrepreneur, Roy Thomson, once described his ownership of Scottish Television as "a licence to print money". The banks didn't even have to go to the trouble of printing the stuff.

As for "risk" and "investment", the banks didn't have to seek out real-economy enterprises that could at some point in the future be financially successful. The more mortgages they made available, the more house prices rose, the safer investment in housing seemed, and the more willing people became to take on bigger mortgages. When the banks ran out of safe prospective home owners, they started lending to unsafe prospective home owners. And when that too had run its course, they stopped lending pretty much completely. That's it. That's all that happened. Thanks to the advent of computer technology, the banks simply found themselves able to turn a customer's desire for a loan into an actual loan. It seems plain, surely, that it is this ridiculous state of affairs, and has to stop.

How did this outrageous scam ever get started? The pressure group, Positive Money, explains it well. The Bank Charter Act, of 1844, removed from banks their licence to print money. The Bank of England printed the money, and the banks bought it. The state retained the seigniorage – the difference between the cost of creating the physical currency and its face value. Now, only 3% of the "money" in Britain is cash from the Bank of England. The rest is electronic, created by the banks, simply by virtue of the fact that the Bank Charter Act didn't foretell the advent of computer-screen credit, and no one stepped in to arrest its development. Positive Money campaigns for the establishment of electronic seigniorage, which would establish a nice little earner for the state. Obviously, this responsibility could not be placed in the hands of politicians. Positive Money suggests that the Monetary Policy Committee could take on this function, gauging the release of currency to the rate of inflation – including house-price inflation. Frankly, the fact that the banks had been gifted with the closest thing to alchemy that humanity has ever contrived, and still managed to screw it up, suggests that a state institution could do no worse than they on this matter.

So, if the banks weren't busy finding easy marks to lend money to, then awarding themselves huge bonuses for their cleverness in doing so, what would their function be? Clearly, banks are needed. Since the crash, the focus has been on separating investment banking from retail banking. This is far too simplistic. On Newsnight the other evening, Larry Kotlikoff, an economics professor at Boston University, was hawking his Big Idea, which he calls Limited Purpose Banking. Like all the best Big Ideas, it would be considered crashingly obvious were it not for the fact that it doesn't seem at all obvious to many people with real power or influence in this area.

Bascially, Kotlikoff suggests that there should be all sorts of banks, for all sorts of purposes. If you wish to invest in British manufacturing, give your business to a bank that specialises in that.

If you wish to invest in local business development, choose the bank that does that. (If you wish to invest in a bank that specialises in state infrastructure, then that ought to be available. It would be quite nice to link such investment to pensions as well.) And so on. Of course, these banks would be lending, too. But they'd be lending from their capital, not "lending" money they had conjoured from the thin air of cyberspace.

Crucially, however, for this to start happening, the users of banks have to start voting with their feet (because no big party offers the opportunity to vote for such change with your vote). It wasn't "everyone" that caused the crisis. But "everyone" can take the initiative in addressing it. Ethical banks, ethical building societies, ethical loan suppliers already exist. According to the campaigning group Move Your Money, half a million people have left the big banks for more trustworthy and respectable organisations so far this year. Since the Libor scandal broke, enquiries have surged again. The Co-operative bank (my own – it's great) is negotiating to buy many of the 632 branches of Lloyds TSB that the group is compelled to sell under the Vickers Report. Community Development Finance Institutions, which offer an alternative to "alternative" lenders such as Wonga (not to mention an alternative to straight-up loan sharks), have grown 300% since 2006.

Perhaps it is true that a credit-hungry populace was a small part of the problem. The good news is that whatever financial services an individual needs, that individual can be part of the solution. The great thing is that thanks to electronic banking, it's never been more easy to shift your financial dealings, lock, stock and barrel. The idea of sorting it all out is intimidating, especially when a single organisation may control your current account, savings, mortgage, insurance and heaven knows what else. But it's fine to open a new account alongside the old one, and move things over gradually.

Why stay with an institution that has made such a huge contribution to the manufacture of chaos, grown rich on it, then blamed everyone but itself for the mess that it left of the world, including you personally? You know you want to switch. So do it.