I have come to the following draft conclusions:
a) The banking system is short of capital and it can't get it from joe public when the future outlook (and government involvement) is so uncertain
b) The non-banking system is short of cash, and can't get that cash from the banks without getting into more debt.
The banking system can be recapitalized by creating New Banks (see earlier posts), not recapitalising the old banks.
The non-banking system can get more cash but how? Printing money and some non-house inflation might be a good option.