The government is to inject up to £37bn of new capital into Royal Bank of Scotland, Lloyds TSB and HBOS.
Royal Bank of Scotland (RBS) is to raise £20bn, with chief executive Sir Fred Goodwin quitting the firm. A further £17bn of taxpayer cash will be injected into HBOS and Lloyds TSB. Barclays has announced plans to raise £6.5bn without government help.
The plans mean taxpayers will own about 60% of RBS and 40% of the merged Lloyds TSB and HBOS.
The Treasury insisted that the government is not a permanent investor in UK banks. The intention, over time, is to dispose of all the investments it is making as part of this scheme in an orderly way.
As a condition of the deal, the government has insisted that senior directors should get no cash bonuses this year, with future bonuses to be paid in the form of shares - a move aimed at encouraging management to take a more long-term approach.
All of the banks own a raft of insurers and intermediaries, and offer branded products.
In the short term, insurance will carry on as normal.
In the medium term, mergers, reorganisation and closure of anything not making money will affect what each bank offers.
In the longer term, to buy back shares from the government, the banks may try to do what RBS tried and failed to do, sell insurance subsidiaries.