Will banking problems hit wider UK economy?

Will banking problems hit the wider UK economy? The mortgage market has shrunk following the travails of Northern Rock. With the number of loan products being reduced and with hefty deposits required, the British housing market is going
to be travelling at a reduced speed. Some homeowners will be trapped and will be
unable to move despite the job offer, downsizing, divorce, death of a partner
etc.
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The Bank of England has cut interest rates but these have been used by the banks to reinforce their profitability. It has been heartening that some banks such as
Royal Bank of Scotland, HBOS and the Bradford & Bingley are reinforcing their balance sheets with rights issues. (The missus has 250 shares in Bradford & Bingley).
HSBC looks big enough and ugly enough to get by so we just have to wait for
Barclays' decision on whether to go ahead with a capital increase.

Profitable and strong banks are vital for an economy even though they can come across as robbing institutions. The British banks have been guilty of pushing cheap credit and it is becoming a shock to the UK consumer for the reverse to happen.
Maybe we are looking at just a further six months of pain.