The key innovation in the model I propose is that this loan is replaced by a new form of Treasury-owned "Equity" in a "Northern Rock Partnership" alongside the existing shareholders, whose conventional share capital would be exchanged for proportional shares in the gross revenues.

This new "Equity" - like the current BoE loans - would be extinguishing bank-created interest-bearing debt, and the monetary effect is therefore zero.

An amount would be charged to Northern Rock for the use of these Treasury credits - which is exactly what is happening now, the amount being the "base rate" of 5.5% pa. This amount would go into the Northern Rock Default Fund/Pool. The effect is close to both interest-bearing Preference Shares, and to "PIBS" (Permanent Interest Beraing Shares) - except that it is neither of these.

The point is that there are indeed flows, massive flows, from the mortgagees. The trouble is that these are not enough to repay both all of the capital and interest.

These flows currently go to pay the remaining wholesale debt and depositors: the balance of costs principally consist of staff costs.

I would allocate a proportion of gross revenues to a Northern Rock staff & management Cooperative, and tell them to get on with it - and maybe:

(a) split any savings they make thereafter in agreed proportions with the other stakeholders;

(b) the management will get a less stupid and undeserved multiple of what the rest of the staff get.

All wholesale debt coming due would be purchased and extinguished; depositors would be told that they were no longer guaranteed, but could exchange their deposits for "equity" on the same terms as the Treasury and the shareholders.

The outcome is one continuous asset class of "nth's" in Northern Rock Partnership revenues: this is what I call "Open" Capital, as distinct form the current "broken" and fragmented Debt/Equity structure.

And don't tell me there won't be any revenues.....

The outcome is to replace a reasonable slug of the "National Debt" with a new form of land-backed "National Equity".

And of course, the Bank of England is no longer necessary - not that it ever was....