12 January 2008
Government edges closer to nationalisation of Northern Rock
The Treasury is edging closer to a nationalisation of Northern Rock as it recruits a former boss of Lloyds of London to be on standby if the government has to take over the troubled bank.
See BBC website, Treasury lines up new Rock boss
What will this mean for bank customers in general? See grubby deal
17 February 2008
Government finally bows to the inevitable and takes Northern Rock into public ownership
After dithering for months and spending millions on "advisers", the government has reached the conclusion that was obvious to most serious observers since the crisis broke in September, i.e. Northern Rock is essentially insolvent. Attempts to come up with so-called private sector solutions have failed and the bank will be taken into public ownership. But New Labour cannot use the N word – Nationalisation. Listen to Alistair Darling avoid using the word throughout the press conference called to announce the decision. See BBC website and watch the video of the statement.
So what will happen next? As previously predicted on this site, the government will be looking to offload parts of the stricken bank as soon as possible. Expect a carve up and bits being taken over by other banks. The price for these cosy deals will be concessions to the banks in other areas such as going easy on penalty charges.
For other news, see news stories
Published and promoted by Bob Egerton, TR2 4RS