I do remember quite well what has caused much of the problem, but the article is about how the banks will not now lend long term to anyone (not just RSLs).
So to your particular points:
'the lack of regulation to ensure security'.... could be taken the other way as the lack of self control in the banks. Surely they are big boys..they got carried away and to be sure we're suffering for it...but now they're returning to 'prudent' lending policies - if youu can borrow for 2% and loan for 5% - that's good business. It avoids another risk.
'If not the owners Neil, who is to blame?' - well ultimately us by getting caught up and allowing it. Unfortunately we're fickle creatures - and we forget the ageless rules of 'if something looks too good to be true, it usually is' and 'caveat emptor' and when it is reinforced daily by the 'get rich' tripe promulgated by supposed TV 'talent shows', obscene 'salaries' paid to footballers and the garbage throughout the print media, we follow along. The concept of 'Bread and Circuses' may be 2000 years old (Juvenal?) but it remain axiomatic.
'Do you deny that the Government's of Greece and soon Italy exist outside of democratic choice - and indeed across North Africa democratic governments remain absent?' - no, but this is about Santander and RBS' lending policies so I will refrain from extending the discussion - albeit it is Friday afternoon and suited to 3 hours discussing the propblems down the pub rather than going back to work.
'Is there not a visible desparation in economists currently' - no. they're lapping it up. 3 scientists stuck on a desert island with a can of beans: chemist - create a compound from acid in the fruit and dissolve the sealing: physicist - heat, cool, heat, cool etc - eventually can will open; economist - assume a can opener.
'What exactly should I not be pointing out' - that the banks, for once, are behaving prudently and sensibly and in OUR long term interest