It is not a lie that banks in UK provide substantial cashflow in the treasury. However, separating customer service banking (including investments in local economy i.e. loans to small and middle businesses etc) from the pure betting on financial markets (derivatives) can facilitate the creation of a mechanism of control from whithin the structure (bank). The responsibility for failed "bets" will remain largely in the institution that has taken the risks and this includes the shareholders that have agreed their assets to be used in such ways on the financial markets.
I believe such separation in the banking can ensure more liability and thus can possibly prevent future financial crisis. It will not stop gambling, but will attach more responsibility to it.
Let me give you an example:
If I go to a casino, and I know that I can bet as much as I want…because my father will pay it all unconditionally (father = taxpayer, ref. last financial market failure), it may be very hard for me to restrict myself in my games. However, if I know that I am liable to repay nearly every cent of the money I spent, I will ensure I set boundaries to my betting behaviour, I will make sure I take less risks or at least I take risks less often. This I believe can be called "regulation from whithin".
Why does this idea matter?
The regulations of financial markets is a widely-discussed topic. I believe the public largely agrees on the need for a change – how can this change be implemented painlessly?