> Banking/ finance types now know that if they are losing money they must simply lose big enough to trigger more bailouts and the taxpayer pays.This is ignoring a fundamental change in legislation that happened pretty much in every major country: the introduction of bail-in. For those who are unfamiliar with the concept, it is a major change to corporate law, it is a power given to the regulators to declare a bank non viable, and to impose losses on bond and equity holders over a week end, a sort of instantaneous chapter 11. The impact of which is to increase the capital of the bank and allow it to re-open the next Monday, affecting the creditors of the bank but not the economy. It is extremely unlikely that a politician, in any major country, would authorise a bail-out before having first attempted a bail-in. And banks are now required to hold a sufficient amount of bail-inable debt (called TLAC or MREL) to ensure that the bank can be recapitalised should it become non viable.
> This will happen again unless investment and savings banks are again separated, but no nation wants to do it
In the UK the regulators are implementing a strict ring-fencing which requires investment banking and retail banking activities to be in two separate and independent entities such that one can go bust without impacting the other.
> Banks and the rich largely hoard capital where it is useless
That's true, banks are hoarding capital, but not because bank like to make useless investment, because they have been required since the financial crisis to increase their capital ratios significantly, which means they need to hold more capital (or reduce their exposure) and not deploy it. But that's the price for a stronger banking system than in 2007.
> Austerity stagnates an economy.
Who does austerity? Everywhere I look I see massive amount of money printing and huge budget deficits. That's not austerity.