Option 1: Turn on the cash tap even farther. Get the Bank of England to make more short-term loans available to cash-hungry banks and relax rules on the quality of collateral they pledge in return as security

Pros Tried and trusted approach, which has at least helped with the short-term money market and stopped it seizing up completely

Cons Rewards bad bank behaviour. Could end up costing taxpayer as the Bank accepts poorer-quality security, including, from today, car loans and credit card debt. Hasn’t ended the agony thus far

Option 2: Issue an explicit guarantee of all UK personal deposits. This would reassure those savers with more than £50,000, the current maximum. Although accounting for just 2 per cent of depositors, they constitute nearly a third of the total deposit base - around £300 billion

Pros Helps to reassure fickle wealthy deposit takers and could help to stop a potential rush of withdrawals. Could be even more effective if extended to corporate depositors

Cons Politically difficult because ministers have criticised Ireland and Greece for this unilateral policymaking, which disadvantages other countries. In the event of financial Armageddon, could be very expensive for taxpayers

Option 3: Change accounting rules. US rules have already been softened to help to allow banks to ignore market prices and value their toxic assets more optimistically. The European Commission is pressuring the International Accounting Standards Board, which polices standards for UK banks, to follow

Pros Fast, cheap, relatively painless

Cons Might not work. Confidence not likely to be restored if banks still own precisely the same unwanted toxic assets, however they portray them on the balance sheet

Option 4: A Europe-wide bailout package on the lines of the US Treasury Secretary Henry Paulson’s controversial $700 billion package.

Pros Could allow European banks, including British ones, to offload toxic assets

Cons Extremely difficult to get EU nations to agree. Potentially very expensive for EU taxpayers with no upside for them if banks recover. Rewards banks’ reckless behaviour

Option 5: Cut interest rates. Eases the pressure on consumers and businesses and helps to reduce the impact of the financial crisis on the wider economy. The Bank of England’s Monetary Policy Committee decides on Thursday

Pros - Popular with borrowers, easy

Cons Unpopular with savers, inflationary. Does not directly address the cause of the crisis. Not in the gift of ministers

Option 6: Part-nationalise the banks

Pros Bold enough, perhaps, to begin to restore confidence. Enables taxpayers to share in the upside if combined with warrants - options to buy more shares at low preagreed prices

Cons Expensive upfront, risky. Could infuriate and disadvantage existing bank shareholders

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