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Northern Rock the troubled British bank to be nationalised UK Treasury announced on Sunday

Northern Rock to be nationalised
By FT reporters

Published: February 17 2008 15:46 | Last updated: February 17 2008 19:49

Northern Rock, the troubled British bank, is to be nationalised, the UK Treasury announced on Sunday.

The decision, the first nationalisation of a British company since the 1970s, ends months of efforts to find a private sector rescuer for the stricken mortgage lender, which ran into trouble as a result of the international credit squeeze.

Martin Wolf: Right decision, but far too late - Feb-17Nationalisation rocks Brown’s reputation - Feb-17

Northern Rock: Darling’s statement - Feb-17Timeline: The Northern Rock crisis - Feb-17In depth: Northern Rock - Feb-04Lombard:

The Rock's hidden alchemy - Feb-09It means that neither of the two bids for the bank, from Sir Richard Branson’s Virgin consortium and Northern Rock’s management team, have been successful.

Both bidders tendered revised offers on Friday after the government threatened that the bank would be nationalised unless their proposals were improved.

The government believes nationalisation is now the best option, even though it is likely to spark a political storm, an angry reaction from some shareholders and big job losses in the north-east of England.

Alistair Darling, chancellor of the exchequer, said that Goldman Sachs, which is advising the government on the bank’s future, had concluded that a “period of temporary ownership” better met the interests of taxpayers.

Deposits and savings would “remain safe and secure”, he said.

But George Osborne, shadow chancellor, accused the government of “dithering” over the bank’s future.

He told Sky News: “We have had months of dithering and delays and ended up in the catastrophic position, on a Sunday afternoon, of the chancellor announcing this decision to nationalise Northern Rock.’

“They have dithered for months and months trying to create a private sale that was never really there.’’

Mr Osborne said nationalisation would damage the UK’s reputation for financial services.

The chancellor confirmed that Ron Sandler, former chief executive of the Lloyd’s of London insurance market, would run Northern Rock.

Mr Sandler will receive a flat fee of £90,000 a month. Ann Godbehere, a former Swiss Re executive who becomes the lender’s chief financial officer, will be paid £75,000 a month.

The government would introduce legislation for the move on Monday. UK listing authorities will suspend the company’s shares prior to opening of the London stock market.

The shares, which closed on Friday at 90p, have lost some 90 per cent of their value over the past six months.

Taxpayers are subsidising the bank in loans and guarantees to other lenders totalling £55bn. Mr Darling said he expected these to be repaid.

“It is our expectation that the company can be moved back into the private sector at the earliest and most opportune opportunity,” he said.

Sir Richard Branson said that nationalisation was “not the right answer”. He said in a statement: “We were very clear the business plan we put forward was robust, conservative but ultimately capable of rescuing the interests of all stakeholders. However we must accept the decision with good grace and hope that the Rock will somehow find better fortune in the future.

“We put all the resources of Virgin’s senior management team on this for five months and we believe had a very strong proposal, an experienced team and one of Britain’s best brands.”

RAB Capital, the hedge fund which together with Jon Wood’s SRM Group holds a near-20 per cent stake in the lender, declined to comment until it had studied the government’s proposal.

In a statement, the British Bankers Association said: “It is important for the confidence of customers and in the UK’s financial services sector that the Northern Rock episode is finally brought to a close. For the bank’s savers and borrowers it is business as usual.

“We now need to work together to put in place a considered framework to prevent such a situation happening again and to ensure the regulation system spots trouble in time and has the skills and powers to take fast effective action in the interests of customers and the UK economy alike.”


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What i get from this

My mortgage will soon by owned by the government.
My money is not safe in any bank.
Most everyone in America (and England) is fast asleep

and Red Pills taste bad......

they leave a coating of disdain and disgust don't they?

Red pills

Are addictive. Once I found out about Ron Paul last December I needed to know everything. I've had a deep sense of needing to become self sufficient for some time but I never knew why I wanted to get off the grids, besides the economic advantages. I've learned so much about the important bills that are going through congress, the ways to get active in my community, how to be prepared, what is actually going on in the world, even alternative medicine from mostly Daily Paul.

I'm really glad I've found a community who have had the same ideas I've harbored, but never acted on because I thought of them impractical or not necessary for a long time. My wife also has had a deep sense of needing to prepare for a long time, but did not have a real important reason to do these things.

Looking at my post I might seem a bit paranoid, but I wonder why after 9/11 the waltons built an underground bomb bunker, or why Bill Gates is building a seed bank on an island off Greenland, or why George W. Bush has 100,000 acres in Paraguay (who has no extradition treaties). Being self sufficient just seems practical. I've started to document my progress at reviveprecints.blogspot.com.


How long until we announce Citicorp and Bank of America etal need similar underwriting bailouts from the American taxpayers?

So ? how long ?

It's already happening. Too late ! game over.

~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~
Stop the NWO....It's just illumi..Naughty !

They tried that

origionally in the stimulus package... mortgage bailouts ... blah.
I'ma assume the Fed will get some laws stricken so they can start buying into Citicorp to ~save~ it.

Expect to see the largest leveraged buyouts in history if that happens.. all with fiat money...

~Live life to its fullest, with an open heart, open arms and most important... an open mind~

Yeah...I couldn't believe they were

talking about Government owning/buying US Corporations (stock) at the Senate last week-the CSPAN of Bernake and Paulson etc....


I'd thought up a lot of scenarios about this.. my dad and I have discussed it since '04. I NEVER saw Government Purchase as an option... don't peopple realize that we would be a de facto communist nation then?

~Live life to its fullest, with an open heart, open arms and most important... an open mind~