Richard Pym must wonder what on earth he has taken on. The man parachuted in to turn around Bradford & Bingley arrived in mid-August just as the bank finally raised £400 million in fresh capital.

Markets at the time were jittery, but no worse, and B&B's share price was 55p. Now much of that new capital has already been swallowed up by fresh writedowns on toxic assets, the money markets are convulsed to the point of paralysis and B&B shares are at 21p and falling.

Mr Pym is starting to earn his £3 million package. First, he has negotiated an end to the absurd deal under which the bank was obliged to keep on buying unwanted, and rapidly souring, mortgages from GMAC.

Second, he has bitten the bullet on some of B&B's more reckless punts in US mortgage-backed securities. Third, he has confronted the awkward truth that the bank is not writing much new business and is not likely to do so in the near future. So he is slashing back the cost base. That is grim for the employees but a no-brainer for the shareholders.

Is this enough? No. B&B can limp on for a while as long as conditions do not worsen. It still has sufficient capital and is OK as long as it can access the Bank of England's Special Liquidity Scheme.

However, house prices are still falling and defaults are likely to continue rising. Any further credit rating downgrade would send B&B to “junk” status, an impossible label for a high street deposit-taker, and would surely force the authorities to act.

Mr Pym needs some luck, or it will be time to exchange the B&B bowler for a tin hat.

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