Lending a few more mortgages and holding a few more savings deposits isn’t going to do a lot for Lloyds TSB or HSBC.
A smarter owner of Northern Rock would be the gang that dismembered Japan’s nationalised banks in the late 1990s after they collapsed under the weight of non-performing loans.
These men, led by Tim Collins, ex-Lazard, and Christopher Flowers, ex-Goldman Sachs, acquired the bankrupt Long Term Credit Bank from Japan’s government, restructured it and brought it back to market, making more than 12 times their original investment along the way.
Since then, Mr Flowers and his crew have engineered the $25bn buy-out of Sallie Mae, the institution that lends to US university students, as well as bought stakes in German and Dutch financials.
So, how hard could it be for these guys to turn a little bank in the North of England into a more efficient institution with only a small portfolio of bad loans?
First, Mr Flowers would have to recruit a group of investors with large balance sheets to solve Northern Rock’s short-term (£30bn) and long-term (£70bn) funding issues.
These could include the same team he used for Japan’s LTCB such as AIG, Citigroup, GE Capital, Deutsche Bank, Santander and investment vehicles controlled by Jacob Rothschild and David Rockefeller.
Then they could bring in ruthless management, ring-fence or sell off the bad loans, and restructure the bank’s lending operations.
Now, it is highly unlikely that this investor group could convince the British government to take on loans that had lost 20 per cent or more of their value - as the Japanese government did with LTCB - but it could perhaps persuade the Bank of England to participate with a capital injection.
As a reward for taking the risk, the Bank could be given two tranches of preference shares which would then convert into common stock and be sold when the bank is relisted on the stock market.
Such a rescue is not as simple as bolting Northern Rock on to a larger high street rival, and it depends on both time and a recovery in capital markets, but it is a much more creative solution.
And if Mr Flowers is lurking around the corner, then it would be a lot smarter to go along with him than to try to force Northern Rock on a reluctant high street bank.