Potential buyers are being vetted by the financial watchdog in the event Britain is faced with another troubled bank. The idea is to have a contingency plan in case the bank takes a turn for the worse. If a bad situation happens and no buyer steps forward possible alternatives may include dissolving the bank and selling its assets or worse case scenario would be to nationlise the bank just like Northern Rock.

Bradford & Bingley are not necessarily about to collapse but due to a high percentage of its mortgage assets in the risky buy-to-let and self-certified mortgage sectors, the next prudent step is to consider bailout options in the event of liquidation.

According to the Financial Times, B&B is not negotiating with potential buyers claiming they have solid funding and are well capitalised. The FSA did not comment but they will surely be looking at ways to deal with the bank were it to become the credit crunch’s next victim.