The fever-pitch of hysteria was reached by The Australian newspaper's Bob Gottliebsen writing "the fate of the Australian sharemarket" rests on the shoulders of the CBA chairman, that if the CBA makes statements later proved to be false "then there is grave risk that the fines could wipe out the shareholders' funds of Australia's largest company" and the bank would return to government ownership.

And a North Korean nuke could land on Martin Place tomorrow. Or perhaps not.

While scorn has poured down on the latest CBA failure, the focus has been on a relative skirmish and ignored the insight it provides into the war. The reality is that regulators are relying on banks with disparate systems to do their legwork while forever playing catch-up with the more organised criminals.

There's no more reason to believe Austrac, Australia's financial intelligence agency, is on top of the game than to have faith in the occasional inane assurance of politicians that we have "the world's best intelligence/police/military". And there's good reason to doubt it.

Austrac outsources its primary investigative role to financial institutions, leaving the onus on them to sniff out and report suspicious behaviour. The banks, thereby locked in a battle of ever-escalating algorithms, each run their own IT race, missing the opportunity to share and collate data.

Regulators banged the banks' heads together to achieve positive credit reporting, but they do their own thing on money laundering and counter-terrorism.

The banks are required to "know your customer", but good luck with that when there are millions of customers, many more millions of transactions and false identities are easily purchased. Throw in accounts in multiple identities in multiple banks without a common database to perhaps sniff something suspicious and expectations of being on top of the problem can't be too high.

A simple dodgy character with a wad of notes just under the mandatory $10,000 reporting limit could well raise the suspicions of a cluey teller, but the sophisticated operators aren't that silly.

Identity fraud is commonplace and becoming more so. The banks - and therefore Austrac - are not winning that war. The failure to adopt the "Australia card" is proving expensive.

So, in the end, to score some wins Austrac does primarily rely on each of the millions of lines of code in banks' systems being correct. And with banks continuously needing to upgrade their filters, yes, odds are a line will fail.

This is not an attempt to excuse the CBA for the handling of its particular failure. Rather it is an indication that the CBA is being prosecuted more for the way it handled its responsibilities than the actual failure.

Our regulators tend to be a fairly understanding lot. When the ability of the regulator to do its job is so dependent on the regulatee's cooperation, it takes an effort, a clear lack of respect, to get them so offside as to throw the book at their biggest frontline investigator.

There's more than a suspicion in banking circles that it wasn't the missing line of code that has the CBA in expensive trouble.