Peter Apap Bologna’s blunderbuss blaming of bankers for the Cyprus debacle (April 2) is the clearest example one can get of how misguided many people are about the roles of both bankers and the system that they operate in.

It is very important to make the distinction between ‘the banks’ and ‘the system’.

The former consists only of the institutions and professional individuals operating in a market and, in essence, these – in a free open market competitive system – will conduct their affairs according to what market practices, legal structures and free competition allows. They will use the fullness of that liberty as far as it goes.

The ‘system’ is however bigger than that. It includes, above all, a country’s regulatory institutions. And I use this term in both structural and political senses.

If Cyprus’s banking industry regulatory authorities, for example, allowed full, unbridled, and never checked acceptance of offshore deposits and lending, in the process never telling or controlling or warning the banks on what they can and/or cannot do in their daily operations, or if licensing and onsite and offsite controls were of a low standard, then, yes, institutions will get into such meltdown situations.

Of course, the politicians are too part of the ‘system’. When a country’s financial regulation laws allow institutions to expose themselves dangerously in particular situational contexts – and a country that was so totally related, dependent, connected to a sinking Greece was such a context – and very early ahead no pre-empting political and legal action is taken to protect the customers of institutions, well then, yes, disaster will eventually be very hard to avoid.

Just blaming the ‘bankers’ is totally incorrect thinking.