When it comes to the prospect of a bailout, it should be remembered that it is not Greece that is being bailed out - it's the institutions that recklessly doled out the Euro loans, writes Ian Verrender.

English poet William Blake captured the imagination of generations with his revolutionary and romantic vision of the afterlife in one of his most famous works, Proverbs of Hell.

One of his more famous lines, written around 1793, goes thus: "The road of excess leads to the palace of wisdom."

It was a proverb endorsed with enthusiasm by everyone from the idle upper classes to the hippie movement. In more recent times, however, it appears to have been the credo of a legion of central bankers and financiers who have flooded the world with cheap cash and a mountain of public debt.

As asset bubbles form around the globe - from the Shanghai Stock Exchange to the Nasdaq, in real estate from London to Lidcome while bond markets from New York to Tokyo shake and gyrate - this week could mark the beginning of the end of the great monetary experiment.

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While it could take some time yet before we reach the palace of wisdom, the unfolding climax in Athens, Brussels and Berlin has begun to harden views on the role of debt and radically shift the conventional wisdom on finance, banking and how to manage an economy.

For months now, even our own chief central banker, Glenn Stevens, has taken to delivering warnings of the limitations of monetary policy; that cutting interest rates is not the panacea to recession that Milton Friedman and his acolytes once proclaimed.

In a world swimming in debt, and still reeling from a debt fuelled financial crisis, the idea that it all could be fixed by throwing even more debt into the mix was always a gamble that at best seemed counterintuitive.

But with the monetarists firmly in control, and the ethos that loose fiscal policy amounts to economic recklessness, it was seen as the only lever to pull.

Regardless of whether Athens and its creditors reach a compromise this week, one thing is certain. The Greek people will endure years more of hardship. But the private sector banks that lent the cash and helped hide the debt for years, will walk away unscathed.

Global banks have risen beyond the scope of national electoral oversight. They have become sacrosanct, particularly since Lehman Brothers hit the wall in 2008, turning global finance into a chaotic maelstrom that threatened the future of Western democracy.

Forty-odd years of financial deregulation and innovation have turbocharged economic growth. But it has helped create a monster.

Once was a staid occupation; the interface between those with excess cash and those who needed money to borrow, banking has come to dominate our economies.

It has become an industry that sucks our brightest and most creative minds into its vortex who, instead of engaging in productive work to benefit mankind, spend their lives shuffling paper, trading obscure instruments and devising new methods by which to enrich themselves.

In good times, our bankers proclaim the benefits of laissez-faire free market economics. But when the going gets tough, they demand taxpayer support. And they get it.

If that sounds like a radical treatise on the evils of modern capitalism, then spare a few minutes, or perhaps an hour, to pore over the latest research from that hotbed of Marxist thinking, the Organisation for Economic Co-operation and Development.

It found that our banking system is sucking the life out of our economy. Not just here, but in developed countries around the globe.

The OECD study has found that financial deregulation and expanded lending boosts economic growth - up to a point.

But when loans exceed 60 per cent of gross domestic product, they start to sap economic growth. Lifting loans from 100 to 110 per cent of GDP actually reduces economic growth by 0.25 per cent.

As Drum regular Michael Janda points out, Australia is off the chart when it comes to debt with a credit to nominal GDP rate of 140 per cent.

A large part of that debt is in ordinary Australian households. Back in 1990, household debt represented about 60 per cent of income. By 2013 - the last time the ABS measured it - household debt had soared to 180 per cent of income.

A large part of that debt is related to mortgages, which now total $1.4 trillion. Prior to deregulation in 1983, most mortgages were funded domestically from the cash banks raised as deposits.

But in the years since, the development of global capital markets and wholesale debt markets has seen our private foreign debt soaring as our banks have tapped ready cash and pushed it into mortgage loans.

In 2013/14, net private foreign debt totalled $639.26 billion, accounting for 74 per cent of all foreign debt and dwarfing the government debt that, according to Prime Minister Tony Abbott, was a "disaster".

An interesting finding in the OECD report was that the growth in banking and the financial sector fostered greater financial inequality.

Bankers, it found, earned a premium to those in other industries as the higher wages "draw the most talented workers into the financial sector where they may not contribute as much to economic growth as compared to jobs in sectors with greater potential for productive innovation".

Bankers created the global financial crisis. As Mike Smith, the soon-to-depart head of ANZ Banking Group, once candidly noted to me: "Bankers found new and interesting ways to destroy wealth."

Only one banker ever saw jail time as a result of the financial crisis. And when it comes to Greece, will anyone call Goldman Sachs to account for its role in hiding Greece's debt from the rest of the European Union and the world?

As for the now shaky prospects of a bailout by the European Commission, the European Central Bank and the International Monetary Fund, it should be remembered that it is not Greece that is being bailed out.

It is the European banks, the French and German institutions that recklessly doled out Euro loans to Greece, safe in the knowledge that any losses would be covered by Frankfurt.

As at December last year, German banks still had 10.63 billion euros outstanding, with American banks following closely and British banks in third place with 9.74 billion euros.

A bail-out, should it occur, will once again shift private debt onto the public books and hopefully deliver central bankers closer to the palace of wisdom. A default, on the other hand, may see financiers for once confront Blake's vision of hell.

Ian Verrender is the ABC's business editor.