We need a plan of action to deal with these banks.
The easiest and most straightforward plan are nationalisation or bankruptcy.
At one extreme is full bankruptcy. Creditors of the bank would be wiped out as seen by the Lehman brothers; this leads to lots of money for lawyers. This is probably a bad move because of the interconnected nature of the banking system; there is lots of paper and therefore lots of legality.
At the other extreme is nationalisation with full reimbursment of those who hae deposited money. The issue with this is that the banks may have very large credit risks, and the UK sovereign may not be able to bear all of these risks.
Somewhat in the middle is restructuring of the existing banks; swapping the creditors into equity.
After nationalisation, the bank would be seperated into a bad bank and a good bank. The good bank would continue to sell. Bad banks are equity investments. They contain assets but no lending capability.
I think the government needs to assume lending capabilities itself. It needs to create some good banks. There should be at least one good bank.