They've taken hundreds of billions of taxpayers' money in bailouts – and still they can't resist ripping us off. What – if anything – can be done about it?

We don't know each other, but I want to offer you a deal: You each give me £20,000. And that's it. What do you get in return? Well, it's a fair question but I can't even promise to pay it all back. But let me assure you of this: your hard-earned cash will keep me in the style to which I'm accustomed. And that's got to be good for all of us. So I'm sure you'll agree that 20 grand is an absolute bargain. Indeed, I would call it a once-in-a-lifetime offer; only I can't promise not to come back again.

You've probably guessed that the transfer I'm talking about has already happened. Each man, woman and child in Britain has already handed over £19,271. And our money has gone to the banks.

According to the IMF, the British stuck £1.2 trillion behind the finance sector. Read that again: well over a trillion pounds in bailouts, and loans and state guarantees on bankers' trading.

In just a few months, and with barely any public debate, every household subbed £46,774 to the City. A sliver of that money eventually went unused; as for the remaining hundreds of billions, we have no idea just how much we'll get back – or when.

There ought to be a verb for this kind of involuntary donation. For true accuracy, it should only come in the passive voice. We could call it: to be bankered. "What happened to the British in the early 21st century?", a future historian will ask. "Poor sods," her colleague might reply. "I'm afraid they got totally bankered".

Twenty grand each is the sum I've looked out for in the coverage of the latest banking scandal; in vain, of course. But what gives this latest market-rigging story such force is that it was carried out by a financial system that taxpayers were bankered into near-penury to prop up. And we did so in the belief that saving banks was vital to the public interest.

But you haven't heard much about the public interest in what will inevitably be dubbed the Lie-bor scam. Instead, the political and media industries have typically treated the rogue bankers as a tale of personal greed or market failure.

So it is that the Daily Mail calls for market-rigging bankers to be banged up. That David Cameron and George Osborne talk up the need for an investigation of how benchmark lending rates are set. As for Ed Miliband, he'll doubtless carry on seeking an inquiry into "the culture of banking" with the same manner he always affects when discussing capitalist crisis: looking like a faintly peeved vicar who has just leafed through the Financial Times and discovered that Bad Things are happening in the cosmos.

All of these demands are partly justified – and all ultimately miss the point.

Where they are obviously right is in recognising that what's come out in the last few days really is a scandal. Through tampering with lending rates, financiers at Barclays and elsewhere distorted everything from how much home-owners paid on their tracker mortgages to the deals struck by pension funds purely to pump up bank profit margins and their own bonuses. The lawsuits for Barclays alone are likely to cost billions.

Against that, the punishment meted out to Bob Diamond's company barely figures. The £290m fine slapped on it by regulators is tax-deductible, making it equivalent to just 13 days' profit. In any case, the bill will be paid by shareholders, rather than traders or senior management. Even today's chucking overboard of chairman Marcus Agius smacks of a firm doing the least it can, and hoping it doesn't have to do any more. Not a hint yet of any punishment for Trader C and Manager E and the rest of the millionaire looters pinging around those internal emails. They cling on to their bonuses and their anonymity, which means they can carry on taking telephone-number salaries in the City.

But it's here that the various stories can't be contained in their respective boxes. The Mail's scapegoating of Cap'n Bob and the Bollinger crew doesn't fit with officials' warnings that this particular mess will not stop at Barclays or RBS – but will grow bigger by the week.

Likewise, you can see why Cameron and Osborne would want to contain any fallout from this crisis, which is why they formally announced today an independent inquiry into the way in which Libor is fixed, alongside a more nebulous inquiry into industry standards.

About time, too. Yet market manipulation is only the most jaw-dropping example of the corporate rampaging that caused the financial crisis.

Early in the crisis, politicians, regulators and commentators discussed this recklessness as being largely about the selling of dodgy assets to other consenting financiers. But as time has gone by what's become clearer is that British banks have behaved in just as predatory a fashion whether dealing with the vulnerable or powerful.

Into the first category fall family butchers, high-street electrical shops and up to 28,000 other small businesses who, it was officially ruled last week, had been force-fed over-complex and expensive financial products. So too do the individual account-holders who were mis-sold billions in insurance they didn't need and which hardly ever paid out. As for the second category, well, even ministers aren't above the occasional poke in the eye; earlier this year Barclays was forced to close two tax-avoidance schemes worth at least £500m. That time, Diamond didn't offer to forfeit his bonus – but shot off a missive to MPs about the "unnecessary damage ... placed on Barclays' reputation".

So in a sequence of events reminiscent of the Wall Street crash of 1929, the same industry that brought you a financial crisis, a double-dip recession and the greatest economic misery in decades is now vomiting up scandal after scandal.

Shot through these iniquities is a high-handed sense of being above the law. It's obvious in the blatancy with which Barclays went about rigging interest rates even at the height of the crisis while taxpayers were bailing it out with subsidies and guarantees.

And it's here that Miliband's explanation runs out of road, too. Because this isn't just an everyday story of ordinary banking folk constantly hatching schemes to pervert markets, morality and the course of justice. In his call for a public inquiry, the Labour leader is desperate to restrict the role of politicians in the financial boom and bust to a mere walk-on part. But in the Libor scandal and elsewhere, the real picture is of an industry allowed to run riot by their regulators and governments.

As far back as 2008, the Wall Street Journal was running front-page pieces, beginning: "Major banks are contributing to the erratic behaviour of a crucial global lending benchmark". Yet neither the British Bankers' Association (which is in charge of setting Libor), nor any state regulator stepped in. More than that, the Financial Service Authority (FSA) report last week referred to "a telephone conversation between a senior individual at Barclays and the Bank of England during which the external perceptions of Barclays' Libor submissions were discussed." As the conversation was relayed through Barclays, the FSA observes, staff "believed mistakenly" that they had the thumbs up from Threadneedle Street to carry on lying.

Expect that statement to be prodded and poked in coming days. But what's clear is that politicians of both major parties sanctioned, even encouraged, the recklessness of the banks. Just a few months before Northern Rock fell over, Gordon Brown told financiers, "This is an era that history will record as a new golden age for the City of London." In 2006, Ed Balls, then-City minister declared, "Nothing should be done to put at risk a light-touch, risk-based regulatory regime."

Such hostages to fortune surely explain why the two Eds would rather focus the spotlight on the City than widen it out to take in Downing Street.

Yet Labour ministers are not the only culpable parties. Last December Cameron stormed out of a Brussels summit that threatened to put extra restrictions on the City. He did it, he said, to protect the "national interest".

The most generous spin you can put on this is of prime ministerial foolishness. This, you might say, just shows how far finance has convinced the British establishment that its special pleading somehow fits hand in Hermès glove with the national interest.

Yet more than enough evidence shows that what bankers want is either no use to the rest of us, or positively harmful. Finance doesn't create jobs: in fact, the number of people directly employed by banks and others has remained almost flat at 1m. As Manchester University's Centre for Research on Socio-Cultural Change (Cresc) points out in its must-read analysis, After the Great Complacence, the taxes paid by finance between 2002 and 2008, during the boomiest boom in human history, came to only £193bn – and were immediately wiped out by the upfront costs of the banking bail-out.

Most of all, banks fail to lend to the real economy. And I'm not just trotting out the old line about how crisis-stricken financiers aren't giving loans to recession-hit businesses. I mean that they haven't been lending to the productive part of the economy for years.

In March 2008, just over three-quarters – 76.2% – of all bank and building-society loans went either to other financial firms or on property for mortgages. Less than a quarter – 23.8% – went to what you might call the productive part of the economy – non-financial businesses.

You will be delighted to hear that things have improved in the crisis. This March, the proportions of loans taken by finance and property slumped all the way to a trifling 74.7%, while non-financial firms took a whopping 25.3%. And manufacturing got just 2.5% of all loans – even though it still makes up around 10% of the economy.

Some of you might look at those figures and ask exactly how far our bankers have reformed themselves during the crisis. The rest, no doubt, are grateful for the huge and beneficial changes being made by the coalition and its "march of the makers".

Given how far banking fails to serve our own national interest, let alone live up to its own propaganda, we need a better explanation of why politicians are so willing to give it another chance, then another chance – all with 20 grand from each British resident with no strings attached.

There's the revolving door between government and the City, which enables Tony Blair to leave No 10 and be chauffeured straight into a £2.5m a year part-time job with JP Morgan. Or the research I've previously cited in these pages showing how today's Tory party gets half its funding from the finance industry.

Most of all there is evidence of how the City retains its stranglehold on economic policy. The same coalition government that likes to promise a "rebalancing" of Britain's economy is even now generating schemes to keep the banks flush with billions – but couldn't guarantee an £80m loan to Sheffield Forgemasters.

Or there's the fact that, nearly five years on from the collapse and subsequent nationalisation of Northern Rock, British taxpayers have still not been provided with a comprehensive review of the causes of the financial crisis. One of Barack Obama's first acts as US president was to commission the Financial Crisis Inquiry Report, a 600-page document that was reviewed in the New York Review of Books as "the most comprehensive indictment of the American financial failure that has yet been made". What's the nearest British equivalent? The Bischoff report commissioned by Alistair Darling in the wake of the crisis, which looked into the long-term outlook for finance. Totting up the career histories of the authors of this government-sponsored review, the Cresc team calculated that three-quarters of their combined working lives had been spent either at a bank or in a closely-related field.

The comparison is laughable. Without review of how the UK ended up in this mess, or reform beyond the narrowly technical proposals made by the Vickers Commission (40% of whose authors were ex-bankers), we are doomed to repeat the same mistakes again and again. Indeed, the evidence is that London is already gaining the reputation of being the SpivZone of international financial markets. At a hearing in the US last month into how JP Morgan lost up to $9bn in the UK in derivatives trading, congresswoman Carolyn Maloney commented: "It seems to be that every big trading disaster happens in London."

This is surely where the pressure from the Libor scandal needs to be directed. Miliband is right to demand a public inquiry. But rather than a nice, compact affair that can be swept under the ministerial carpet, any investigation needs to understand how to reform the finance sector so that crises like these don't recur; and so that banks actually work in the public interest rather than hire propagandists to pretend they do. Because in the end, financial reform is not about technicalities, but about politics: deciding what role banks should play in an economy, and what kind of economy we want.

And just as the Leveson investigation has unpicked the toxic intimacy between the Murdoch empire and the political classes, so any inquiry into finance needs to expose the strength of its grip on our politics.

In the wake of the Lehman's collapse of 2008, there was much talk about how the relationship between state and finance would be changed in the public interest. Those efforts were effectively killed off by the finance lobbyists and, if we're honest, the unpreparedness of progressives in Britain to seize the opportunity. The Libor scandal offers a second go at the same argument. We either have it out this time, or we run the risk of repeating 2008. Only next time, the British might need to cough more than 20 grand each. A lot more.