The British taxpayer has been in the home mortgage business for a couple of weeks but it is already time to move on. The bail-out of Northern Rock by the Bank of England, which extended a large credit line to the bank, and the Treasury, which guaranteed its deposits, has halted a run and restored a measure of confidence. The next step is to get rid of Northern Rock, quickly.

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Robin Harding on the likely options for Northern Rock

The troubled lender loses value with every minute it spends in the central bank’s intensive care unit. Borrowers, depositors and suppliers will steadily withdraw their business. Northern Rock’s systems, staff and branch network, built to handle a certain volume of business, will become a liability rather than an asset. The greater the erosion of Northern Rock’s asset base, the greater the chance of loss to the public purse, most likely from the guarantee extended to depositors.