Reflecting on the global credit crunch

I've been thinking about the "credit crunch" that seems to be rolling around the world's financial markets creating all sorts of havoc.

For me this whole debacle highlights the critical flaws in a global financial system which appears to be essentially founded not on trust but on greed. Had the financial institutions that originally exposed themselves to the risks of the so-called sub-prime lending market acted responsibly and with due regard to their customers and other stakeholders, rather than being driven by naked greed, the financial markets would not be in the situation they now find themselves in. Greed has failed, and has exposed the fact that there is little or no trust between these financial institutions, so all the financial institutions are now unwilling to lend to their fellow institutions for fear of skeletons in the closet.

Instead it appears that it is down to the taxpayer to bail out these people, as governments in the UK and the US seem to be pouring public money in to create desperately needed liquidity in the markets.

Maybe I'm missing the point here, so please correct me, but it sort of feels like yet another market failure, and one right at the heart of the capitalist machine.