The banks have made some bad business decisons – but as far as I know none were illegal. The banks operated within the rules laid out for them by the relevant Government department – which department – The Treasury.

Who has been in charge of The Treasury for the last 10 years – Gordon Brown.

Also – since Gordon Brown became Chancellor ~ 1 million jobs in Engineering / Manufacturing have been destroyed – mainly due to higher indirect costs imposed by this Government which drove the jobs overseas.

To artificially keep unemployment figures down ~ 1 million jobs in the Public Sector have been created. So – 1m jobs that created primary wealth (which can then be taxed) have been destroyed to be replaced by ~ 1m jobs that are financed solely out of taxes from a lower taxable base. The result has been a catastrophic deterioration in the Public Finances – supported (amongst other measures) by stealing £5 billion a year from our pension funds.

However we are where we are – so what to do:-

1) Longer Term – the Government has to have a long term strategy that supports the formation of jobs that create primary wealth – not a strategy that destroys them. This strategy needs to be driven by business logic – not media soundbites.

2) Right now – for those companies which are in distress / or even think they might be – act right now, today – get good advice from mangers who have been there / done it / been through previous recessions and know what to do. Delay / denial is fatal!

How willing will banks be to swap debt for equity to resolve over gearing and broken covenants in the private sector? – given their risk aversion and preference for cash I would have thought that this fell into the category of last resort.

Will the PE community open their coffers to start serious bottom feeding either by taking the banks out at a discount or using the pre-pack option? As an aside the pre-pack has been getting very bad press recently as it inevitably damages unsecured creditor businesses.

To what extent will the wall of maturing corporate bank debt and bonds (c £100bn for 2009) be refinanced and how aggressive will the terms be? Will this be a significant restructuring and M&A driver, as a means of avoiding fire sales during 2009/10?

How much more public funding will be required to offset the additional impairment and write offs required on bank balance sheets? Even the Government admits it doesn’t know.

How does UK plc avoid damage to its healthy mid market businesses, that should be part of the engine for economic recovery?

Will/can banks and government stop playing to the media and think/act beyond the politically correct soundbites – with more than a tinge of intellectual dishonesty?

Bold decisive operational restructuring, process improvement, disposals and mergers will be required, driven by hard nosed strategy – the natural comfort zone for many Interim Managers. The timing may be still uncertain but the requirement is inevitable.