Evan Davis asked me on the Today Programme this morning whether the probability that taxpayers would eventually emerge with a profit on Northern Rock implies that it was a mistake to nationalise the Rock at the start of 2008.

That conclusion can’t be drawn – because the losses that the Rock has suffered over the past two years of almost £1.6bn in total were massively greater than expected by any of the possible private-sector bidders for the Rock.

All the bidders – including the Rock’s own management team – seriously under-estimated the difficulties that the Rock’s borrowers would face in keeping up the payments, especially on the so-called “Together” mortgages (where the combined value of a mortgage and personal loan “package” taken out by customers exceeded the value of their respective homes).

So, for example, the Rock’s management team put together a bid for the bank in early 2008 based on a forecast that there would be losses of just under £200m in 2008 and then a return to profit.

In the event, the Rock has suffered losses on mortgages and loans going bad in excess of £2bn over the past couple of years – or five times more than the Rock’s management and other bidders for the bank expected.

So if the Rock had been kept in the private sector, the capital of the bank would have been wiped out. And nationalisation would have been merely postponed rather than avoided.

What’s more, even if there hadn’t been a formal transfer of the equity to the public sector, this bank was on life support from taxpayers – with around £30bn of taxpayer loans at the peak and a formal state guarantee against losses covering its entire £100bn balance sheet.

Which means that keeping it in the private sector, in the sense of ownership of the equity, would have been something of an accounting charade

In fact, some would say that if there’s eventually a profit for taxpayers from taking full control of the Rock, that would be a vindication of the decision to nationalise – for two reasons.

First, that the business would arguably have haemorrhaged more without the explicit backing of the state.

Second, and more importantly, the nationalisation of the bank has permitted an exceptionally efficient reconstruction of Northern Rock with regard to its additional capital needs.

This reconstruction involved splitting the Rock in two: as of this year, there exists a new smaller retail bank, with just £10bn of mortgages on its books and £19.5bn of retail deposits – making it one of the most prudently financed banks in the world – and an “asset manager” which holds some £50bn of older mortgages.

The retail bank, called Northern Rock, will be privatised, probably later in the year. And the asset manager will stay in the public sector.

That asset manager will no longer take deposits. So it requires less capital to underpin its assets as a cushion against possible future losses.

This is a long-winded way of saying that net new investment by taxpayers in Northern Rock since privatisation will emerge at around £1.6bn in total – which is the amount that taxpayers would have to get back to avoid making a loss on the nationalisation.

Is it conceivable that £1.6bn could be raised from the combination of the privatisation and the repayments over many years of the mortgages held by the nationalised asset manager?

Yes, that is possible – if not inevitable.

But it will be years before we know.

Which is not to say that there are no more difficult decisions on the Rock for whoever forms the next government.

The most tricky will be whether maximising proceeds from privatisation is paramount.

There are plenty of voices – especially in the Rock’s North East home – calling for the new Rock to become a mutual once more, a vanguardist for a new generation of conservatively managed building societies.

The appeal of creating a new super-prudent, customer-owned savings-and-loans institution would be obvious to many – except that if the Rock were mutualised rather than sold, taxpayers would probably end up suffering a loss.

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Northern Rock, the nationalised bank whose collapse is most closely associated with the onset of the credit crunch, is almost out of hospital.

In formal accounting or statutory terms, it actually made a profit in the second half of 2009.

But there were a couple of big one-off credits that flattered the bank – including a refund of £350m of supposedly penal interest rate charges levied by the Treasury, following approval of the Rock’s rescue by the European Commission

In underlying terms, there was a loss of £139m from July to December last year and a loss of £383m for the year as a whole.

Which looks very good compared with the stonking loss for 2008 of £1.3bn.

Costs have been reduced by almost a third, and the confidence of depositors seems to have stopped eroding – even though the Treasury has announced that it will no longer guarantee their savings in a formal sense.

The bank has now been split in two, with some £50bn of mortgages to be retained in state hands and a small retail bank to be put up for sale, probably in the second half of the year.

There’s even a fighting chance that, as and when that bank has been sold and the older mortgages have been paid off, taxpayers could end up making a profit on this most fraught of nationalisations.

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There is a comprehensive account of the government’s diagnosis of what went wrong with the financial system in a speech given last night at the Smith Institute by the City minister, Lord Myners.

It doesn’t contain anything particularly new. But, as it happens, I don’t recall any minister attempting this kind of overview.

Myners makes three substantive points:

1) Markets are a good mechanism for distributing capital, goods and services, but not a perfect one – so we must recognise that those who worship a deified perfect market are worshipping a false god;

2) It’s unfortunate that wholesale and professional lenders to the likes of Royal Bank of Scotland and HBOS, and even providers of putative risk capital, were bailed out by taxpayers – because it proved that these banks could behave irresponsibly and more-or-less get away with it, thus undermining any incentive for them to behave more responsibly;

3) There has been a systemic, long-running failure of institutional investors to exercise their ownership rights over companies in a rational way, to prevent those companies – especially but not exclusively banks – from taking actions that damage the interests of owners.

To most of which – I would guess – there would be a wide degree of assent, from the leaders of the opposition parties and from many of you.

But beyond the bloomin’ obvious – such as that banks must be forced to hold considerably more capital to protect against losses and to increase their stocks of genuinely liquid assets as insurance against runs – we are still a long way from consensus on the appropriate prescriptions.

On the issue, for example, of how to make sure that banks don’t take crazy speculative risks now that it has been proved beyond doubt that taxpayers will bail them out, Myners makes slightly contradictory suggestions – though it’s probably wrong to single him out for criticism, since these contradictions are inherent in most of the remedies suggested by assorted governments.

First he extols the virtues of living wills, or a proposed new obligation on all banks to have detailed, practical plans to hive off their retail operations in a crisis. The aim of such measures is to prove to the world that only those retail bits – which look after the vital interests of households and businesses – would be bailed out by the state in a crisis.

The hope would be that banks’ more speculative activities – their investment banking operations in the main – would be seen by their creditors as inherently more risky. And that these creditors would have a powerful motive to prevent those banks taking dangerous risks.

Which is good in theory. Except that if a Goldman Sachs or a Barclays Capital went kaput today, it is inconceivable that it would not cause horrific contagion, both to other financial institutions and to the economy (if for example asset prices collapsed or the rug was pulled from under important non-financial companies).

So unless and until these investment banks can be massively shrunk in respect of size and scope, there would probably still be state protection for the more speculative activities of universal banks such as Barclays or Royal Bank of Scotland.

So Myners and the British government also favour some kind of Obama-style insurance fee to be paid by banks, such that the costs of any bailout would be met by bank and their owners, not by taxpayers.

But there’s a problem with creating a blanket insurance scheme of that sort: it would provide an unwelcome new incentive to unscrupulous banks and bankers to take crazy risks in pursuit of short-term profits and bonuses; if the bankers’ bets went wrong, the insurance scheme would pick up the tab.

In other words, bank insurance schemes re-import to the banking system more-or-less the same moral hazard problems as the free insurance that has been provided by taxpayers (without our assent or knowledge) to too-big-to-fail institutions such as Royal Bank and HBOS.

And, by the way, the Bank of England has demonstrated the financial benefit of that free insurance to big banks: over an extended period, they were able to borrow more cheaply than smaller banks perceived by creditors not as inherently more likely to fail, but as less likely to be bailed out by taxpayers were they to get into trouble.

As for what the former fund manager Myners has to say about how shareholders can become more diligent and wise stewards of companies, here he makes a point that was largely ignored in the recent furore over Kraft’s takeover of Cadbury – which is that it is the acquirer of a company and that bidding company’s owners that are more often damaged by a takeover than the target company.

Think RBS and the rump of ABN, which RBS bought in the autumn of 2007. RBS and its shareholders were seriously poisoned by the deal. ABN and its owners should forever be profoundly grateful that RBS’s board put aspiration for global domination ahead of commercial common sense.

Here’s the relevant nannyng point: Britain’s code on takeovers and mergers was created primarily to give protection to shareholders in the biddee not the bidder.

It is designed to ensure that a biddee’s shareholders are not prevented from entertaining a full and proper takeover offer by the selfishness of blocs of minority shareholders or the fear of the biddee’s management that they’d be out of a job were the deal to go through.

But if in the end it is the bidder which suffers more often than not – through having paid too much in an acquisition or through having bitten of way more than can be chewed and digested – perhaps it is shareholders in the bidding company which deserve a bit more protection.

This of course will be at the forefront of the minds of the Prudential shareholders today, as they agonise over whether to support the Pru management’s record-breaking $35.5bn offer to buy AIA.

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The Prime Minister has chosen today’s International Women’s Day to argue that there’s a strong case for obliging private-sector companies to report annually on the progress they’re making in promoting women to senior executive and non-executive position.

It is certainly striking how few women are on the boards of the FTSE 100: just one-in-ten board directors are female; which means that companies with as many as two women directors are the exception.

And, of course, female chairs and chief executives are harder to find than even women editors of newspapers or broadcasting “on-air” editors who aren’t men (that’s a big hello from me).

Now there is a case – which I put last July before it became fashionable to do so (see my note “Why men are to blame for the crunch”) – that the absence of women from the top of banks and financial companies meant that the atmosphere of board rooms during the bubble years was heavy with testosterone; and the consequence was a culture of dangerous risk-taking in the macho pursuit of short-term profits and bonuses.

You may dispute that. But even if you do, you surely can’t believe that entrepreneurial, wealth creating talents reside exclusively in the Y chromosome. So the dearth of women at the top must surely be depriving the UK of incremental income at a time when we need every penny we can squeeze to pay our way in the world.

But if companies will be forced to produce a report card on their efforts to make their senior management team look a bit more – in a gender sense – like the world rather than a dusty gentlemen’s club, it’s perfectly reasonable to examine Gordon Brown’s record.

I don’t mean in respect of the civil service or the Cabinet, although both areas of government remain a long way from gender equality.

So if for example you look at the senior positions in the Department for Innovation and Skills, which is co-sponsoring today’s “business must be less sexist” initiative, the secretary of state is a man, the permanent secretary is a man, there is one female minister out of ten, and there are just two women among the 11 most senior officials.

BIS’s annual report card on promoting women might say “must try harder”.

And, before you attempt to turn the tables back on me and the BBC, I should point out that almost all the senior management posts in the bit of the BBC where I work, BBC News, are filled by women – including the top job, Head of News, held by Helen Boaden (who – oh yes – reports to two men, the deputy director general and the director general).

However I’m more interested in how the government has exercised its clout over those bits of the private sector where it can more-or-less instruct boards to do as it says: I’m talking about the government’s gender record as 100 per cent owner of Northern Rock, 84 per cent owner of Royal Bank of Scotland and 41 per cent owner of Lloyds.

All of these organisations have seen the departure of their chairmen and many board members since the state took its big ownership stakes in them as part of rescuing them from collapse.

So are these three nationalised or semi-nationalised banks now run by a new generation of female bankers? Are there more women on their boards than at comparable businesses?

No and no.

The new chief executives at the Rock and RBS: men. The new chairs of the Rock, RBS and Lloyds: men. The vast majority of board members of all three organisations: men.

All three banks are playgrounds for ageing white men just like me and the prime minister. The Rock has one woman on a board of eight. RBS has one woman on a board of 12. Lloyds has one woman on a board of 14.

Which is why there are some who are bound to argue that Gordon Brown should get the gender mix in order in his own house, before preaching to the rest of the private sector.

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How much will the super-tax on bonuses raise for the Chancellor?

The FT this morning says £2.5bn gross and £1.5bn net; the net figure is the difference between the gross amount and what he would have raised from existing income tax on bonuses that would have been bigger had it not been for the super-tax.

So it’s the net figure that matters. And that £1.5bn compares with a forecast of £550m made by the Treasury when it launched the one-off bonus tax in the pre-budget report last November.

Is the FT right?

Based on some calculations I did yesterday, it is plainly in the right ballpark – although the Treasury believes that it is erring on the high side.

The bigger bonus-paying UK banks – HSBC, Barclays and Royal Bank of Scotland – say they will collectively pay £668m (which implies, just to remind you, that their total bonuses to UK resident staff are £1.3bn, or just a fraction of the total bonuses they are paying).

What of the bonus tax being paid by overseas banks with employees based here for tax purposes?

Well I’ve spoken to executives at JP Morgan, Goldman Sachs, Morgan Stanley, Merrill Lynch, Credit Suisse, UBS and Deutsche. And I come up with an aggregate figure for them of £1.8bn.

Which would take the gross figure to within touching distance of £2.5bn – taking no account of proceeds from smaller banks.

However I don’t have the information to assess how much the Treasury would have received from bonuses if it hadn’t imposed the tax. We know that some banks have shrunk the bonuses they pay in the UK to reduce their liability to the 50% levy, but we don’t know HMRC’s original bonus pool forecast.

That said, it is blindingly obvious – as I’ve been saying almost since the tax was launched – that the Treasury’s £550m prediction was ludicrously low.

PS It is something of an open secret in the City that British based bankers who have taken lower bonuses this year to spare the blushes and fiscal pain of their respective employers have been given unambiguous nods and winks that they’ll be seen right in the next bonus round.

What a comfort!

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The government, the Tories, the Lib Dems and the European Commission all say they want it: that’s to build a more competitive banking market in Britain from the devastation wreaked by the bulldozing credit crunch.

What I’ve learned is that first steps have been taken in this direction with the formal launch by Royal Bank of Scotland of the auction of Williams & Glyn’s, the small business and retail bank it is being forced to sell by the Commission.

The sale memorandum has been sent by RBS’s financial adviser, UBS, to possible purchasers. And initial bids are due in April, before the most likely date of the general election on 6 May – though completion of the disposal is unlikely till after the election.

In respect of the rehabilitation of wounded Royal Bank, the sale will not be very material. According to bankers, proceeds may be around the book value of what’s being sold, or possibly even a bit less, so perhaps a billion pounds or so – which would be a drop in the ocean of RBS’s 2009 operating losses of £6.2bn.

But in respect of competition in the banking industry, the deal is potentially more important.

RBS is selling a business with 318 branches, about £20bn of loans and other assets and 2% of Britain’s retail banking market – which is not huge, but not irrelevant either.

Perhaps what is most important is that 70% of the assets are loans and credit provided to small and medium size businesses, which is the part of the market where – many would say – competition is particularly inadequate.

The remaining 30% is credit provided to households.

So who is going to bid?

Well the two banks that seem most enthusiastic are Santander and Sir Richard Branson’s Virgin Money.

And of the two, Santander can obviously afford to pay more, because it would be able to reap sizeable cost savings from the takeover thanks to its substantial existing presence in the UK.

Virgin, however, would argue that it would increase choice and competition in Britain more than Santander would do – for the obvious reason that it isn’t yet a substantial player in British banking.

What’s relevant in that context is that Santander was originally on a list produced by the Commission of big banks that would not be acceptable buyers of Williams & Glyn’s, because sale to them would not promote competition.

However that draft list was eventually ditched and replaced by a market share threshold for bidders: the combined market share of a bidder and Williams & Glyn’s mustn’t exceed 15%; and Santander just limbos under that bar.

That said, the natural buyer of Williams & Glyn’s in many ways would be National Australia Bank (NAB) because its British branches in Scotland and the North East would dovetail beautifully with Williams & Glyn’s in the North West and Scotland.

And if NAB enters the fray that would introduce some tension in the bidding process.

But bankers tell me that NAB may well decide to sell its UK operations, Clydesdale and Northern, possibly to Santander – which would rather stymie Royal Bank’s disposal.

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