Today the Bank of England published the results of its latest round of stress tests aimed at assessing the financial strength and resilience of the UK’s major lenders. The Bank tested how bank balance sheets would hold up under a doomsday scenario which included significant falls in house prices, a severe domestic recession and turbulence in the global economy.

Under the tests it was the 73% taxpayer owned Royal Bank of Scotland (RBS) which performed worst, with the Bank of England concluding that RBS remains susceptible to financial and economic stress”. Provisions against future fines for past misconduct were the biggest factor in the bank’s failure to pass the tests. As a result, RBS has been forced to put forward a plan to raise an additional £2 billion of capital to bolster its financial strength.

The stress tests come as the Bank of England painted a bleak outlook in its Financial Stability Report, describing an environment of elevated global and domestic risks which pose a threat to the stability of the UK financial system. These risks include the fallout from the US election, contagion from Brexit, worries about rapid credit expansion in China, the UK’s large current account deficit and rising UK household indebtedness.

Concerns were also raised about the stability of the euro-area in light of ongoing political uncertainty. On Sunday voters in Italy will vote to approve reforms to the country’s constitution, with Prime Minister Matteo Renzi stating that he will resign if the reforms are rejected. Were this to happen, it has been reported that up to eight of Italy’s troubled banks risk failing, sparking a period of heightened uncertainty and turmoil in global financial markets.

Given that the UK has one of the largest, most concentrated, least diverse, most risky, most complex, and most interconnected banking systems in the developed world, the UK economy is particularly exposed to any turbulence in global financial markets. With the outlook for the UK economy looking increasingly bleak, it’s more urgent than ever that we act to fix our broken banking system, starting with the bank we already own: RBS.

RBS’s failure of the Bank of England stress test is just the latest evidence that eight years on from the financial crisis, the bank is still failing its customers and its owner – the UK public. While RBS is clearly still paying the price for past misdeeds, the recent revelations about its treatment of small business suggests that not much has changed at the bank since the crisis.

In last week’s Autumn Statement the Government acknowledged that, in light of the collapse in RBS’ share price and ongoing legacy issues, further sales were not practical at the moment” and that the right time to look at this again would be when those issues are set”. In its Economic and Fiscal Outlook, the Office for Budget Responsibility (OBR) stated that it does not expect any shares in the bank to be sold over the next five years. This is a huge U-turn from the previous Chancellor’s plan to hand the bank back to the private sector before the end of this parliament.

With it now being clear that the bank cannot be sold in the near future, it’s time to put all options for the bank’s future back on the table and examine whether there are alternatives that could deliver better value for businesses and the economy.

The New Economics Foundation has proposed turning RBS into a network of local banks with a public interest mandate to serve their local area, lend to small businesses and provide universal access to banking services.

This would invest in and regenerate disenfranchised communities, as well as mitigating the economic consequences of the vote that are likely to hit us: local public banking networks in Germany and Switzerland kept their economies going through the last recession while UK banks were cutting back their lending.

Big, deep challenges require big, deep solutions. It’s time for small businesses, bank customers, rural communities and unions to unite and demand a response from government that matches the scale of the crisis we face.