Stephen Hester, the new CEO of the Royal Bank of Scotland is dividing the bank into two main elements – today’s core business which is profitable and will carry on; and a peripheral cluster of ‘assets’ which will be sold as soon as buyers can be found. These ‘assets’ are the £300 billion debts – mostly toxic – acquired during the disastrous investment banking adventures that have brought the bank low.

Hester needs to show his shareholders that the heart of the RBS can succeed. Splitting the structure in this way means that he can point to one and try progressively to dispose of the other.

The identification of assets to be put up in a fire sale will inevitably mean job losses and industry experts are predicting that these may run to 20,000.

This news comes as Gordon Brown announces a plan to spend £500 billion in insuring the so-called toxic debt acquired by UK banks while at the same time pumping £15 billion, much of it new money, into the mortgage market by 2011 via Northern Rock. This is being done in an attempt to reverse the movement of the economy towards a settled recession.

Experts predixct that this move will itself create a twin track mortgage market, even within Northern Rock itself. Current mortage holders will continue to face repossession while new mortgagees will see much more favourable terms under the proposed injection of ‘new Government money’.

The national debt is now at a frightening level. Last week it was independently estimated by the Office of National Statistics at £2 trillion, when the value of the banks’ toxic debts are included.

Brown’s latest gamble – in insuring these debts and in going for what is called ‘quantitative easing’ – or printing money, as it is less ambiguously known to most of us – is also frightening. It may be too little too late.

On the one hand the UK is borrowing on an unimaginable scale and one which will bring real and widespread pain in the repaying.

On the other hand, Brown’s response pattern from the start of the collapse of the banking system has been to do as little as possible and to leave that until he had no alternative.

This means that none of the moves to date – however much they have cost us – have achieved the necessary stabilisation of the economy. From the reluctant, progressive upgrading of the bank guarantees to savers onwards, each move has been too small, too late and too indecisive. In effect, it has largely been wasted money.

Since early last Autumn when the financial industry began to unravel, there has been an argument that Brown’s best strategy was to make an early, large and bold move. But that is not his character.

The real nightmare is that the current massive debt will be our long term burden without achieving anything significant. It has been accumulated progressively, in fire-fighting dribs and drabs, each of which has vanished without impact.

However mad it seems, printing money might work in hands other than Brown’s but, with his track record throughout this crisis, hope that he might get this right would fly in the face of the evidence.

Brown has also set his face openly against a course recommended by many experts – dividing banking into two functions: the normal high-street retail banking and the high risk investment banking sector. The decision to carry on with the current twin-function banks will leave the taxpayer, now the owner of so much of the UK’s banking stock, liable for the risk-taking sector which could otherwise be hived off as purely private sector ventures.