Rising delinquencies in Bradford & Bingley’s mouldering book of buy-to-let mortgages expose some of the challenges the government faces in supervising its interests in British banks.

When the chancellor announced arrangements for managing the state’s shareholdings on Monday, Northern Rock and B&B were not his top priority. UK Financial Investments’ first task would be to deal with any stakes the government acquired in Lloyds TSB, HBOS or Royal Bank of Scotland. “In due course”, UKFI would turn to managing the state’s interests in the nationalised Northern Rock and the £42bn mortgage portfolio of B&B.