Bradford & Bingley gave us a glimpse on Friday of how dicey things were early in July. The bank came uncomfortably close to becoming a second Northern Rock. It admits that customers were rushing to pull out their savings as the bank repeatedly failed to nail down rescue financing.

“It was a scary time, not just for us but for the whole world,” Rod Kent, the chairman, told me. The bank suffered “hundreds of millions of pounds” in net withdrawals as rescue deal after rescue deal crumbled. Kent declines to speculate on the economic and political damage if B&B had failed. “I'm not a historian, I don't write 'what-if?' novels,” he says.

But it seems unlikely that Alistair Darling, the Chancellor, could have survived a second big bank failure on his watch. The same goes for Mervyn King, the Bank of England Governor, and Hector Sants, head of the Financial Services Authority.

It might be fanciful, but a collapse could even have brought down the Government if things had got seriously messy and the contagion had spread. Governments tend to fall after moments of national humiliation. It's hard to overstate the damage done last September by TV images of queues of panicking Rock depositors beamed around the world.

Happily, fourth time lucky, B&B got its £400 million and ministers and regulators are still in their jobs. But it took some serious arm-twisting by the FSA to get the big battalions of high street banking and insurance to rally round and ensure that a deal was done.

The financial world did not cover itself in glory over B&B. The company misled its shareholders over the need for new capital, tolerated hopelessly inadequate management information systems and inexplicably allowed underwriters to its first abortive capital-raising to wriggle free. The external advisers appeared asleep at the wheel, the underwriters were not exactly loyal to the client and one rescue bidder, the private equity group TPG, fled back to America at the first sign of trouble.

Mr Kent is confident that B&B has sufficient capital to weather whatever the icy winds of the property market throw at it. Its franchise remains more or less intact. And, whisper it quietly, its specialisation in buy-to-let lending has not yet been proved to be the dumb strategy its rivals suggest. Tenant demand is strong, rents are still rising, voids (periods when properties are empty) are falling.

The pain is far from over, however. Arrears are rising, margins are thinning, fraud is on the up and the wholesale funding window is still largely closed. And it's unclear how supportive the bank's new shareholders are going to be: the lock-up preventing sales expires on September 10.

What is undeniable, though, is that things could have been a whole lot worse. In Bingley, and in Downing Street.

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