A bank insurer, not a toxic bank
I don't know why the government hasn't knocked on the head the idea that it's working on the creation of a bad or toxic bank that would buy our biggest banks' dodgy loans and investments.
What I expect it to announce on Monday (although the timetable could slip a day or so) is the creation of the mother of all bank insurance schemes.
By the way, the Treasury is also considering making an offer to Lloyds/HBOS and RBS to convert the expensive preference shares they've sold to the government into ordinary shares.
If this happens, I would expect RBS to say yes and Lloyds to say no. And the conversion would see the state's holding in Royal Bank rising from 57.9% to around 70%, or a good step nearer full nationalisation (see below for more on this).
But back to this insurance scheme to give banks and their investors a bit more certainty about the losses they would face as the recession undermines the ability of many borrowers to repay their debts.
Our biggest banks would identify their bad loans and foolish investments. And they would then pay a fee to a new state-backed insurer to protect themselves from losses over a certain level on these stinky assets.
But the banks would retain these bad assets on their balance sheets. They would not be transferred to a new toxic bank. We as taxpayers wouldn't own the stinky loans - though we would be liable for losses on them over a certain level.
Why the urgency of doing this?
Well, in just a few weeks we'll see results for 2008 from our biggest banks. As I've already pointed out, Royal Bank of Scotland and HBOS will announce unprecedented, horrible losses.
And the HBOS losses would represent a massive drain on its new owner, Lloyds TSB.
There's a fear that unless the Government has developed some kind of safety net for them by then, there could be an alarming loss of confidence in the banking system of the sort we witnessed in September and October.
So next week we'll get the announcement that just such a safety net, in the form of the insurance scheme for toxic loans, is in the process of being designed and built.
In a way, it can be seen as a way of getting capital into RBS and Lloyds/HBOS in particular without fully nationalising them.
That said, the scheme will be open to all our very biggest banks. So Barclays too could insure away future losses on certain of its loans and investments if that suited it - although on Friday night it insisted that it had made stonking profits of well over £5.3bn in 2008.
However, I don't expect a long and detailed statement on the institutional mechanism by which we as taxpayers will pick up part of the bill for the longest banking blow-out in history.
Nor do I expect, as this stage, the government to put a number on the likely cost to all of us as taxpayers of putting a floor under banks' losses - although the potential liability would run to tens of billions.
Of course it's entirely possible that if the new state insurer values the assets properly, taxpayers could end up over the years of the scheme with a profit.
But it seems unlikely that this will be a very popular policy. Readers of this blog have repeatedly asked why we as taxpayers should bail out the banks for the consequences of their greed and recklessness. The question I'm always asked is: whatever happened to the old-fashioned idea that we should pay for our mistakes?
For those working around the clock this weekend at the Treasury, in Downing Street, at the Bank of England and at the Financial Services Authority, the priority is to restore the strength of the banking and financial systems, to stem the remorseless contraction of credit that's caused our awful recession.
In that context, the Treasury and UK Financial Investments (the institution created by the Treasury to manage its investments in banks) have been preparing to make an offer to Lloyds/HBOS and Royal Bank, to convert £9bn of their preference shares (owned by the Treasury) into ordinary shares.
The reason for doing this would be to remove from them the heavy financial burden of paying the 12% dividend of the preference shares.
In the case of RBS, for example, the dividend represents an annual cash outflow of £600m and for Lloyds/HBOS the outflow is £480m.
In theory, if the two banks didn't have to pay this dividend they could lend £27bn more every year (because under FSA guidelines, if the £1080m of dividends were retained by the banks as equity capital, the banks would be able to lend a multiple of that core Tier 1 capital).
My strong sense is that RBS would love to convert the prefs, which it regards as costly debt, into ordinary shares - even though that would see it owned 70% or so by the state.
However Lloyds TSB is less keen, because it's 43.4%-owned by the public sector and doesn't want to see state-ownership rising above 50%, which would be the result of converting the prefs.
It will be interesting to see whether Lloyds' shareholders would agree that it's worth paying out £480m of cash each year to taxpayers to prevent that creeping nationalisation of the bank.
Anyway, as readers of this blog know, there'll be plenty of other initiatives announced next week by the Treasury, most of which can be seen as deploying taxpayers' resources to encourage lending.
One of these will be an extension of the timetable for Northern Rock, the fully-nationalised mortgage bank, to repay what it's borrowed from the Bank of England and the Treasury. This would put less pressure on the Rock to shrink the amount that it is prepared to lend.
Which, at a time when the problem for the economy is a shortage of credit, sounds a bit like an outbreak of common sense at the Treasury.