No-one's picked up Anatole's point about the difference between officers and shareholders. The officers have made off with megabonuses leaving shareholders to pick up the tab. Ditto Equitable Life. So shareholders carry the can for not supervising the officers, but how can they do that? Anatole?

Nigel, London, UK

The average American is up to his/her eyeballs in debt. No matter how much you give the banks the people will still be in trouble. We have not yet learned to say no when offered money now and pay it back later. People need to learn to live within their means, credit is a tool not a way of life.

Jim, Boston,

US banks borrow from Federal Reserve Bank. The Fed lends them money created from nothing. When banks repay the Fed the money turns to nothing again. Make the Fed forgive $700 bilion of bank debts. Money supply would then stay the same, no one loses anything, and banks then have money to loan out.

Jon Maynard, Lansing MI, USA

Conclusion "there will be no banks" is incorrect. Fortis was taken over with government 50%. Benelux governments will sell their shares as soon as the situation is stable again. There will continue to be banks but with other shareholders. And some shareholders have lost money.

JPHR, Lelystad, Netherlands

People also seem to forget that the vast majority of bank employees are not billionaires, they are ordinary people doing often very dull admin & operational jobs. The only reason wages in banking are slightly higher is because the jobs are so boring.

freya, london,

SOLUTION........Government takes over the Sub-Prime
mortgages and allows people a 3year interest holiday on
their repayments. Where houses have to be repossessed
due to job losses, they should be rented out until it is prudent
to sell them, thus bringing in an income, gradually 700 Bn
repaid.

Roger, Weymouth, UK

The Israelites had to wonder in the wilderness for 40 years.

This generation of politicians, bankers, accountants and other business leaders will never be able to solve this.

Why ? The problem is due to excess debt and their best solution to date is more debt.

Get banks back to saving.

Derek, Cape Town , SA

I have no sympathy whatsoever for bank shareholders. It is their apathy which is one of the main causes of the crisis. If they had taken an active interest in what the boards of directors were up to and how they were rewarding themselves then we may not be in this situation.

Clive, Pocklington, England

Lots of "Its all the bankers fault, let them burn" arguments as seems the rage. Absolve the homeowners responsibility, why not?! - why did so many borrow 100% mortgages, thinking the housing market was a one way bet, and they'd all be rich. Bankers were not the only greedy ones. Look in the mirror

James, London,

The banks created the problem.
If I am financially irresponsible, who bails me out?
No one' I go belly-up!
Why should I give up my hard earned me to bail out a bunch of irresponsible goons who financially benefitted from the mess they created?
They should suffer the consequenses!

Robert Postuma, Montreal, Canada

And just to get the 700 billion figure in perspective .....

"It's not based on any particular data point," a Treasury spokeswoman told Forbes.com Tuesday. "We just wanted to choose a really large number."

Richard Crow , Warsaw, Poland

The problem was that banks stopped lending to each other. So there must be banks out there now sitting on piles of loot, err, money, doing nothing. Why don't gov'ts act as clearing houses with guar'tees for lending these funds.

Ray Powell, Victoria, BC, Canada

"American politicians" are theoretically representing the will of their constituents - not making policy decisions in a vacuum. We've seen enough uninformed meddling and corrupt coercion. This problem can be solved without added taxpayer debt burden. AK has been consistently wrong, and is here.

Carl, Indy,

Anatole was about the last to recognise there even was a problem and ever since has been a foot-dragging apologist supporting the banking industry!

Objectivity has never been his forte; why is he still employed? "Journalists" such as he - who constantly talked up the market are part of the problem!

Jon Quirk, Johannesburg, South Africa

Two things:

- first, your article seems to defend the indefensable: that all UK banks can or even should be saved. NO, THEY DON'T. Be realistic for a change! Some banks are simply beyond rescue.

- second, don't you dare knocking punishing these greedy pigs. They have it coming!

rice2dumb, Leuven, Belgium

Another reason that the banks are suffering such demands for "punishment" is the everyday banking experience of the man on the street, who is typically as far from the City or Wall St as you can imagine - a so-called "service" industry that cares little for its' customers & charges indescriminately

Robin McGowan, Abu Dhabi, UAE

It seems that "Mark to Market" valuations of banks runs against the basic accounting principle of treating a business as a going concern. "Mark to Market" looks more like a break up valuation of a business; no wonder confidence is so low.

Roland Platt, BRENTWOOD, UK

Standing back is not punishing. The banks don't have an inherent claim to $5,000 from each tax payer any more than I have a claim on $5,000 from the guy next to me on the bus. Letting investors support themselves is the fairest thing to do.

Joseph, New York City, USA

You have fudged the vital distinction between shareholders, who own (but do not control) banks, and the executives who run them in practice (mostly in their own interests). The system of accountability has broken down, so executives are not answerable and profit even if their bank crashes.

Tom Welsh, Basingstoke,

Everything I read about this situation indicates that it is so complicated that few, if any, properly understand how to move forward. Also, this is compounded by the likelihood that the whole truth has yet to be revealed. Meanwhile rumour and speculation threaten to irreparably damage the world economy to the detriment and expense of all. Why can the major Governments of the world not suspend trading in Financial shares and by so doing give themselves time to find the truth and a viable solution? The constant application of poorly considered “sticking plasters” just makes things much worse

Bob Cook, Helston,

But estimating net present value of assets based on hypothetical future earnings depends on risk, so you're back to the ratings agencies. Cheaper to start new banks! A bank with $700bn in net assets would be worth about 5 times that amout right now.

Mark D B, London, UK

Are you not going to acknowledge the stupidity of the statement, "just as there should be no reward without risk in a market economy, there can be no risk without reward" as I pointed out in a previous post? To guarantee some reward is to remove all risk. NO reward IS the risk in any investment.

Alex Ritchie, Salisbury, UK

Whatever needs to be done, initially lenders wanted to lend huge sums they did not have to people that could not pay back. They then sold these bad debts as valuable, to others of their ilk, so that large turnover bonuses were enjoyed. That is fraud and they should be charged.

Findlay, Lanark,

How many new homes would have been built in the U.K. but for the bank lending? The Treasury profited from this boom before bust.
How many of those who say "let the banks fail" do not have an interest in their success through their pension funds? Failing banks would put millions on the dole.

laurie, tunbridge wells,

Some may see this as punishing bankers, but anyone who believes that moral hazard is a price too far for taxpayers to pay will think otherwise. You blow hot and cold on risk: who do you expect to take the risk of lending depositor's money to people who will never be able to meet full repayment?

clive, enfield,

If a person is dying from gangrene in one leg, you don't save their life by liberally coating the affected area with salve; you cut the leg off. Let the ailing banks fail and clear the system of the worthless paper they are holding. Only then will measures for restoring confidence possess meaning.

Richard Crow, Warsaw, Poland

Shareholders appoint the board of directors. The board appoints the CEO, etc, etc. If the proper corporate governance and oversight is not demanded from the Shareholders, I find it hard to fathom why they shouldnt be held accountable when the bank gets into strife? Be it bank bashing or not.

Jason, Matraville, Australia

You're absolutely right about backing the shareholders, whether they are individual investors or governments, but absolutely wrong about mark to market.

Changing the accounting rules caused the last US crisis, that of S&Ls, in the late 80s. Read Floyd Norris in the NY Times if you don't believe me!

Paul W. Meek, Burke, USA

18 years ago I owned shares in British & Commonwealth, they went bust, I Iearned a few things.

roger sykes, christchurch,

given that banks always loan more money than they hold,it would be impossible to save them all if the assets that secure the loans lose there value. it follows that somebody must carry the loss, and that somebody is always" the People" who else? but the banks must also be seen to share the pain.

Eddy, Bury St.Edmunds,

Bailouts should only be made as long as serious changes are implemented to ensure this doesnt happen again.

How about stopping fractional reserve lending? I dont see how lending money you dont have creates a stable system, although im by no means an expert on this subject! Just a suggestion!

Martin, York, U.K.

After all these years of being told the 'market' should be allowed to prevail, now it seems it's a different story. Let it prevail! I heard that Paulson got $500 million in his last year at Goldmine Sachs before becomg a game-keeper. Can this be true? How about a windfall tax on these bankers?

john problem, Hackney Wick, UK

All the sympathy seems to be given to the Banks & Shareholders.
I pity those who make payments every month on property over valued by so called professionals, who should have known better than to allow more than 90% and 3.5 times Annual Income.
Why not subsidise them?
Result no default. No problem.

M Sheridan, Oldham, UK

The point, dear Anatole, is that those who caused all this and made off with huge bonuses are unlikely to face any penalty at all. This is wrong, and they should be punished.

Roger Pearse, Ipswich,

The mark-to-market versus probabilistic actuarial accounting point is moot. Both are fallible; the former since liquidity is never guaranteed, as the banks (and homeowners) are now discovering. The latter since econometric forecasting is as much art as science.

SSG, London,

We all, including your commentators buy into "we've got to help the poor banks "The cause is GREED and PANIC. The majority will be better off without them. Banks have money, we trust them with ours, lets see them return our trust and lend to each other.The risk is small get on with it !!!

Brian, Norwich,

The workers will still work, the farmers will still farm, etc. The crisis is for those who have property assets who will see their net worth greatly diminish. What does the bank do for me? It receives my paycheck and gives me access at various convenient places. None of that will change.

Neil, Norwich, UK

The banking sector has become far to big, causing it to spend more time trading with itself and creating ficticious business rather than actually serving the real economy.

One way or another, it needs to shrink to a natural size. The "plan" just puts this off for another day.

Nick, France,

Pretty much as George Magnus has been saying all along. He seems to have been the only one with a clear head in all of this.

Iain Birrell, NYC, USA

So your proposed solution to real problems are fictional accounts? That's what got us into this mess! The problem with the bail-out is it doesn't address the real problem, defaulting debtors, only the effect on banks. Help the debtors directly (part-ownership?) and the rest will sort itself out

Elizabeth, Slough,

The Paulson package would not have woked, even if congress passed the 700 billion plan.
I am not sure President Bush belived in Paulson to begin with. Although did support the republican party out of tokenism.
Let the market decide. If banks are in real need, they will survive, or maybe they die.

kevin, redlands, United States

Throughout history, what has happened when the ruling class goes too far? The American people are quickly running out of things to lose. I suspect the Western word is at a watershed of ideology and values. And I wonder if that is why so many are now willing to let the system fail. Time will tell.

Clinton, Edmonton, Canada

Kaletsky is doing the proverbial facing the wind with a full bladder. The mood of the public is against his arguments. It is hard to defend the greed of people paying themselves in excess of twenty million a year and then some in a bonus. K. has got it wrong all along and still doesn't understand.

John Walter, bonn, germany

I agree. Punishment of the 'wrongdoers' is irrelevant. Too few people understand that the very basis of the capitalist financial system is now threatened. If the world's banking system is not supported, all our savings will be in the hands of governments. And Karl Marx wins. Is that what we want?

Bernie, Essex, , UK

Mr. Kaletsky, how can you defend this bailout of the dishonest banking billionaires? The top ten CEOs paid themselves over 1 Billion Dollars over the last two years. Paulson is just trying to bail out his chums. The passing of the bailout will mean the death of the free market and also of democracy.

William Kent, Brandon, Canada

Mr Kaletsky, most of what you say is true, but the very fact that the managers and traders CAN make off with billions, leaving either the shareholders and depositors to suffer, or the taxpayer to replace those billions, makes it imperative we don't just save the system without correcting that fault.

D. Milligan, Bristol, UK

You are probably correct that suspending mark-to-market accounting would alleviate the immediate pressure on banks but it does not solve the problem longer term. The prospect of losses on mortgage portfolios remains and the extent of such losses are unclear. Still hard to attract private capital.

GH, NY, USA

Let the banksters fail!
Instead of giving 'm a hand-out for the risks they knowingly took, how about giving us regular folks a hand up to pay our mortgages and rents?
Most of us did not gamble too much with our futures, paid our taxes and would be livid if our taxes were given the looser fat-cats

Some, Manchester, UK

Going back to accounting based on the likelihood of debtors paying back what they owed is not a solution. Who decides this likelihood? How is it calculated? And if you can calculate it, then why did banks still lend money to bad debtors? Banks need to pay the consequences of their actions.

Bilal Patel, London, UK,

Banks will continue to reposess the houses of defaulters , frankly that is the question . These banks are ruthless, a little taste of their own medicine and they will be taught a certain human ethic ,, monetary forgiveness ! reposes the bank mangers house thats the opionion of the people with debts

peter Kavanagh, London,

I'm glad that the 'rebels' took to heart Reagan's quip that "one of the most frightening statements in the world is 'I'm from the government and I'm here to help you'" as did Bush II and Paulson.
Second thoughts are invariably the best&to include mark to market in the final draft would be excellent

Dr Andris Lielmanis, Brampton, Canada

its true that leaving shareholders with nothing when doing a bailout may disincentivise shareholders from investing in troubled firms. however investors may invest in more stable firms instead. shareholders are taking risk when they invest, if they oversee a failing company then they should lose all

andrew, london, UK