Can Branson keep Rock edge?

In contrast, winding-up, or administration to use the official term, would acknowledge that the cause was hopeless, and the best course would be to salvage and sell what could be sold and close down the rest.

The bid from Sir Richard Branson's consortium changed those perceptions. It demonstrated that a private-sector solution was possible, and it then took only 24 hours for price to emerge as the central issue. Northern Rock needs not just a simple takeover bid but also a root-and-branch financial restructuring to replace the Bank of England's deposits, so one might think the shareholders are looking a gift horse in the mouth. Not content with being rescued, they are being picky about the price. Sir Richard made it obvious the bank could be saved, and they are now looking for a saviour who will pay them more.

Branson has changed the game in another way. Though he is not the most popular person in the City, or in Whitehall, he clearly still has a huge following in the country, and the linking of his name to the rescue has had a dramatic effect on retail-customer confidence. This week, for the first time since the crisis started, there has been a noticeable slowdown in the rate at which retail deposits were being withdrawn. If it does come to an auction with other bidders, this may give him an edge.

But who are those other bidders? Lloyds TSB came close to buying Rock before the crisis was public knowledge. One would have thought conditions have since moved enough in its favour for it to have another crack. Halifax owner HBOS is another absentee, surprisingly because it was so obviously interested in Abbey a few years ago.

But it is unlikely to get involved. Partly it worries about the huge hole in the Northern Rock balance sheet, but more significantly it has decided to cut down on its involvement in mortgages because of the chronic overcapacity in the UK mortgage market - which is something rescuing Northern Rock will do nothing to solve.

That, however, is another story. For now, it is all about whether Branson can remain the front-runner in the race to keep the Rock rolling.

RBS can make a go of equities

The Dutch Central Bank has still to approve the Royal Bank of Scotland integration plan for the parts of ABN Amro it bought after the long summer battle with Barclays and until then the British bank cannot go public on what it plans to do. It has, however, been allowed to make an exception of Hoare Govett, the London-based equities business owned by the Dutch, and today RBS announced it is going to keep the business and integrate it with RBS Capital Markets.

There is a bit of déjà vu about this for those who have been around in the City for a while. National Westminster bank, which is now owned by RBS, had a long flirtation with the equity markets after Big Bang in 1986 when it bought broker Fielding Newson-Smith and the jobber Bisgood Bishop and topped that up later with the purchase of Wood Mackenzie from Hill Samuel. Operating under the County Bank label it flourished for a while but was badly holed by its starring role in the Blue Arrow affair.

Much money and time was spent well into the 1990s in trying to consolidate and restore momentum to the business under a variety of colourful leaders. They even bought boutique adviser Hambro Magan, now known as Hawk-point and owned by Collins Stewart, but after one fiasco too many which resulted in huge losses on options, management gave up on equities.

This time, though, it is different. Hoare Govett remains a quality business and, despite everything thrown at it, it retains a powerful position as broker and adviser to a lot of mid-market companies, and a dozen or so FTSE 100 businesses. Indeed, though it is not widely appreciated, equity-related business accounted for about 20% of the revenues of the assets bought by the Scottish bank. RBS, for its part, has lending and debt-focused relationships with virtually every UK company of size, so the scope for cross-selling and introductions is obvious, albeit managing these things is never easy.

The business case is quite easy to make. The RBS balance sheet can be put at the disposal of equity clients facilitating deals and allowing RBS to offer the whole package from debt through derivatives to equities, letting the group capture all of the business, and allowing a wider product offering to a wider range of clients. The trick is coping with the ups and downs, having a management that keeps its nerve in bad times and provides consistent support, and managing the egos within the different parts of the bank so the different teams do what is best for the clients rather than what is best for their own silo or desk. So it is not going to be easy, but you can see why they want to try.

Surprise change among insurers

Typically, the insurance industry reacts to increased competition by cutting premium rates to grab market share. This causes competitors to do likewise and sends rates even lower, making a bad market worse. That is why insurance careers from boom to bust.

But as premium rates have weakened we have heard the argument that this time it will be different, because many Lloyd's players are now listed companies whose shareholders would not tolerate such suicidal behaviour. Instead, they would demand surplus capital that could not be used to write profitable business should be returned to them.

To the amazement of those who thought insurers would never change, it is happening. Beazely for one has a share buyback programme and yesterday Chaucer announced a massive exceptional increase in its dividend. Perhaps this time it will be different.