Banks to follow UBS lead on bad loans

While Regulators are paying attention to preventing catastrophic damage to the banks, I feel that any solution that does not put the home owner buyer back in his home will still damage the economy severely.
We need consumers buying housing products to upgrade their homes, not renting furniture for their new tiny apartments.

The current banking business model has failed drastically, if the banks can't trust banks, why should any one else. Who will buy into the toxic waste fund. The fundamentals in banking are trust and confidence and so far the banks do not inspire any of these qualities.
The next category to fall is leveraged commercial buyout loans, credit cards and all sorts of other consumer and construction loans, how many bad banks can be created.
Is the idea to fail the bad banks and the taxpayer to foot the bill in the end.