BBC Radio 4, Today Programme, Monday 17 September at 06:15.

NICK COSGROVE

Do you believe Northern Rock has any future as an independent business?

EUAN STIRLING

No, I must admit it doesn't. The brand has been so badly tarnished by what has gone on recently and the funding position, despite the Bank of England emergency facility, doesn't really leave Northern Rock to go out and carry on lending the way it has done for the past few years, so I think its independent days are up.

NICK COSGROVE

And how much blame must Northern Rock's management shoulder for last week's events?

EUAN STIRLING

Well, I believe it's no accident that Northern Rock are in the position they are in and other banks aren't. The company has been aggressively lending for the last few years, lending more than double its natural market share while at the same time it's been completely... or not completely but wholly reliant on the wholesale funding markets. Now, this has got it into problems particularly as its treasury management has been very weak, that treasury management resulted in it having to issue a profits warning earlier this year, having just a few months prior to that raised its profits growth guidance to analysts in the City, so I think we're looking here at a problem that has been generated by management failures rather than the credit squeeze that we're seeing at the moment.

NICK COSGROVE

But who would want to buy Northern Rock in the event that it was sold?

EUAN STIRLING

Well, the one thing that you have to remember underlying all this is that it does have a pretty high quality book of mortgages and that is an attractive asset to many other banks in the UK but it will only be an attractive asset at the right price. Now, I mentioned at the outset that I think its days as an independent entity are probably up but perhaps not immediately. I don't see people stepping in this morning immediately to support a share price, I think we're probably due another day or two of weakness until the price meets the level that people will want to actually step in and either buy the assets or buy the whole business.

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