I do not see the dangled carrot of tax payers money inspiring the bankers and financial bigwigs to sort their own houses out.

Leave them to fend for themselves so that the markets can identify the value in organisations and write-off the rubbish.

If the national state governments continue to bail out the banking sector, it will lead instead of a short term shock and correction, to a long term depression such as that suffered by Japan during the 90's which to a great extent it has not truly emerged from even now.

As for Governments, how about adding housing values into your CPI calculations. Perhaps then you will see these housing asset bubbles develop and you can then adjust your economic leavers to cool it down.

Removing the biggest and most expensive consumer item and a large proportion of your economy from the very formulae used to measure that economy has allowed house price inflation of 20% in a year whilst quoting CPI at 2% or there abouts. It was always going to tempt people to borrow more than 'normal rates of interest' would permit them to afford to service, which then led to more and higher valued demand for housing stock, stoking the fire of the housing bubble. House to earnings ratios have been on the rise now for 30 years and as the U.K and U.S are discovering, they are unsustainable in a normal market.

I predict the exact same is going to happen to Australia.
I would recommend buying fixed caravans and renting these out over the next 5 years. People will lose their properties. Unoccupied properties will be on the banks books which no one will want to or be able to buy, and the normal rental market could rise due to demand and price evictees out. Caravans (trailer parks in the U.S) could be their savour.