Oct. 21--A sign of how deep the levels of denial still run in the banking industry came in phone calls last week from people who are, er, influential in the sector.

The callers asked: had I noticed how many of those beastly building societies have yet to pass on the Bank of England cut in interest rates to their customers? They must be profiteering! They are anti-consumer!

Building societies aren't perfect, but none of them have gone bust at our expense. When two recently feared they might be in some difficulty -- Derby and Cheshire -- Nationwide took them over with a minimum of fuss, seamlessly, to protect savers.

The societies pulled together in the mutual interest, in other words.

For the banks to still be spinning against the mutuals just as they themselves need multibillion handouts just to stay solvent shows how deluded they remain.

It's precisely because the building-society business model has not been recently exposed as a failure that they are entitled to run their outfits as they see fit, passing on interest-rate cuts when it seems prudent to them.

By contrast some banks -- especially those that converted from building societies on the understanding it would be better for us all -- clearly need direction from government about how to manage themselves. They can't be trusted with our money.

This being so, they might think now is not the time to criticise others. But collectively they still seem to imagine they are victims of circumstance, rather than of their own policies.

All the way down, the bankers' explanations of what happened to the huge institutions they run have been different versions of the same excuse: it's someone else's fault.

At first it was those reckless Americans, borrowing vast amounts of money they couldn't pay back. Then it was short sellers, daring to argue that banks are overvalued. Then it was the government. Now it is the stock market -- an irrational force that doesn't see how wronged they have been (on the way up, the markets proved how brilliant they were, of course).

If the rest of us had faced this level of evidence that we had got it so horribly wrong, we would surely show at least some contrition.

In search of this, I went to Angela Knight, the chief executive of the British Bankers' Association.

Speaking up for the banking industry never looked like the best job in the world, and in fairness to Knight it must now be among the worst.