2.11 In September 2007, the Treasury considered that public ownership was the option most likely to minimise immediate risks to financial stability, while at the same time providing it with the degree of control necessary to protect the interests of the taxpayer. The Treasury, however, did not see public ownership as an immediate response as other options were preferable and should be considered. In addition, two potential drawbacks were identified:
■ As there was, in its judgement, a reasonable prospect of a private sector buyer coming forward, taking the company into public ownership might have precipitated action from Northern Rock's shareholders and introduced uncertainty for other investors in the UK banking system;
■ It could have led to reputational damage to the UK's standing as a leading provider of international financial services.
2.12 Ministers decided that public ownership of Northern Rock should not be an immediate response. The Treasury did, however, commission a team of officials to work up proposals for putting this option into effect should it be required at a future date, including the task of drawing up, as a contingency, draft legislation that might be put to Parliament. There was at this time no legislation on the statute book, or available in draft form, that would allow the Government to take the company into public ownership. The Treasury believed this presented a significant practical barrier to acting quickly. In the meantime, the search for a private sector solution would be taken forward.