We live in truly astonishing times. In the past 24 hours alone, on both sides of the Atlantic, five banks have either been nationalised, bailed out by their governments or sold on at fire-sale prices.

We live in truly astonishing times. In the past 24 hours alone, on both sides of the Atlantic, five banks have either been nationalised, bailed out by their governments or sold on at fire-sale prices. Yet, despite that accelerating carnage, America's House of Representatives last night threw out the modified Paulson plan to inject $700bn of taxpayers' money into the system, by buying up all the toxic paper with exposure to the US housing market currently polluting bank balance sheets.

The White House, both presidential candidates, the Democratic majority leadership in both the House and the Senate, countless commentators and mainstream market opinion all endorsed the need for action. After long days of horse-trading, the original proposition had been modified to meet public concerns that Wall Street was being rewarded for its past excesses.

However congressmen and women, on both sides of the House, knew they faced a troubling choice. Ideologues aside, they could either endorse this massive public stimulus to get frozen credit markets moving again or, with elections looming, they could say no, for fear of facing voters outraged that financial fat cats were being bailed out with their hard-earned tax dollars. By a majority of 23, Congress decided to say no. More than 90 Democrats joined those voting against. Republicans blamed the Democratic speaker, Nancy Pelosi, for taking a partisan line in the debate. Wall Street plunged. Chaos prevails. More talks are promised once the full impact on markets is felt. No one seems to know when normal financial service might be resumed, if ever.

Barack Obama plunged into the aftermath. He told supporters in Colorado that if elected in November he would, on day one in office, review any bail-out plan that finally gets to the statute book, to see if it is both saving the economy and paying every taxpayer back every dollar they might be required to subscribe towards getting the banking system moving again.

That's a vast requirement. One that may well add to the terminal uncertainty already hanging over the whole crisis. And uncertainty is already reshaping the entire banking landscape on both sides of the Atlantic.

What is happening is extraordinary. It is hard keeping pace with the casualty count. Yesterday five more banks succumbed.

In mainland Europe, Fortis, the biggest financial services group in the Benelux countries and partner with our own RBS in the break-up of ABN-Amro, has been partially nationalised by the Dutch, Belgian and Luxembourg governments in a massive £9bn bail-out.

In Germany, after its shares fell by more than 70% in a single day, the second biggest commercial property lender, Hypo Real Estate Lending, has had a £28bn injection from the government and a group of banks.

The Icelandic government has spent nearly £500m to acquire a 75% stake in the country's third-biggest bank, Glitnir. And in America the sixth-biggest bank, Wachovia Corporation, has been steered into the corporate maw of Citigroup, reportedly for as little as $1 a share.

Here, we are preoccupied with the nationalisation and break-up of Bradford & Bingley, the last of our once-proud building societies to discover that scrapping their prudent mutual status to chase the lure of speculative market gold now comes at a very heavy price, as all that overblown leveraging unravels.

Those of us who argued at the time that, despite the lure of windfall bonuses and shares, swopping mutual status for shareholders and market exposure could all end in tears, can now say: We told you so. But that's the least of it. The sheer scale of the destructive forces now resonating through the banking sector are amplifying every hint of individual weakness. The share prices of surviving banks plunged yet again yesterday.

HBOS was down another 18%, its shares fully 90p below their putative value (232p) when the terms of the emergency Lloyds TSB takeover were first announced. All banks suffered. But the numbers are now suggesting Lloyds is paying well over the odds for HBOS, bad news for those trying to mount a bid rebellion.

If banks don't trust each other enough to lend to each other, investors are saying, why should we believe any of them that the stories they tell about their balance sheets are any more believable?

That mood is being compounded by the absence of decisive action in Washington. It is also being exacerbated by the terms of the UK government's nationalisation of Bradford & Bingley's mortgage book.

The sale of the B&B savings and loans business to Santander subsidiary, Abbey, is being facilitated by £14bn of cover from the Financial Services Compensation Scheme and another £4bn from the Treasury. The FSCS exposure is being underwritten by a loan from the government. But the government wants interest on that loan and, later, the repayment of the principal.

Since the FSCS is funded by the banks still standing, that could add another £9bn or so of longer-term liabilities to bank balance sheets. Factoring that into the HBOS/Lloyds deal may help explain why markets are doubting the numbers there stack up. But if the current chaos persists, could a stand-alone HBOS survive? I wouldn't put money on it.