As we detail on pages four and five, it was a week in which spelling out how bad things had become only made the markets more jittery. Nervousness first gave way to panic. There is now hysteria and the next moves may need to include temporary suspension of stock markets to allow investors to draw breath.

Another round of globally coordinated interest rate cuts also looks likely. No country can afford to go it alone, not least because of the risk to its currency. With inflation near or at its peak, there seems little reason for interest rates not to come down sharply. Some forecasters are predicting UK rates at 3.25% by the end of the year. The big question then will be whether banks and building societies pass on the cuts to customers. The banks – especially those soon to be owned by you and me – should be ordered to do so.

The pre-Budget report is now awaited with some trepidation. To balance the books the Chancellor needs to raise taxes, but the devastating impact of tax rises on consumers and businesses would be political as well as economic suicide.

Instead, he needs to restore confidence by stimulating demand in the economy. That means tax cuts, or at least tax holidays. For businesses: VAT breaks, more rates relief, and abolition or suspension of proposed legislation that will add to the cost burden. For consumers: more help with paying gas and electricity bills, a freeze on council tax and a review of town hall spending, which remains wasteful and misdirected.

CBI Scotland today proposes a series of measures to revive Scotland's economy, which revive two of its big campaign issues: privatisation of Scottish Water and scrapping plans for a local income tax.

There have been calls for Scottish Water to be privatised for several years and the recent introduction of competition for business customers is a start. But it has been tepid and there seems little likelihood of competition being extended to the consumer.

The current SNP administration is happier to seek loans from rich Middle Easterners rather than submit to privatising water, even though it would provide an estimated £2bn to £3bn in revenue. It is also likely to stick to its LIT plans, which are friendless outside the Holyrood parliament.

Just as the world is asking if institutions such as the G8 and the International Monetary Fund have become irrelevant, regional government also needs to assess its effectiveness. If the Scottish Government wants to play its part in finding a solution to the financial hardship facing us all, it may have to rethink policies that are no longer fit for purpose.

Clydesdale cashing in on restructuring

CLYDESDALE Bank has breezed through the credit crisis without barely turning a hair, giving chief executive Lynne Peacock every reason to feel vindicated for the painful restructuring it was forced to go through.

So did she and Clydesdale just get lucky? Well, only in so far as she avoided the pitfalls of the sub-prime and self-certification mortgage markets, the over-leveraged corporate deals, dependency on wholesale funding and convoluted financing vehicles that have brought down its bigger rivals. Phew!

In fact, the bank that she and her chief operating officer David Thorburn have created was reconfigured out of necessity. After all, it was in a poor shape in 2004 when the unsecured lending portfolio – credit cards, personal loans, etc – and its cost base were out of control. It looked like becoming the bank that its parent, National Australia Bank, could have done without.

Peacock and Thorburn are not denying that the coming year will be anything but tough and the latest annual figures show some erosion of profit from bad debt that is likely to become a feature of all the banks' forthcoming trading statements. However, they hope the public will discriminate between the bad and good bankers.

What's more they're unfazed by the prospective merger of HBOS and Lloyds TSB. In fact, they see opportunities from the combination of the two into another superbank.

This may be a bit of spin for the benefit of the rest of us, but the air of confidence is unmistakable. In a consolidating market, there is always room for the niche and nimble player and that is what Clydesdale intends to be.