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December 2, 2008 11:30:19 AM CST

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Brits Hatch Secret Plan to Bail Out Northern Rock

Posted Dec 18, 07 2:05 PM CST in World,  Business 

(Newser) – Worried that the state might be stuck nationalizing Northern Rock, Britain has worked up a contingency plan behind closed doors to divide the troubled bank among the country’s commercial banks. A private buyout is still preferable, the Guardian reports, but some now fear the main bidders will back out, leaving the government holding the bag.

If the government can’t unload Northern Rock, it will push public debt over 40%, breaking one of Gordon Brown’s fiscal rules. But the big banks' help isn't free—the institutions will probably want guarantees that they won’t lose money on the deal, and preferential treatment in an industry that’s lately been much investigated.

Source Guardian (UK)

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British Prime Minister Gordon Brown appears before the House of Commons liaison committee in London Thursday Dec. 13, 2007. Lawmakers are likely to use the opportunity to press Brown over troubles at...   (Associated Press)
A branch of British bank Northern Rock PLC is seen in Croydon, south London, in this Friday, Sept. 14, 2007 file photo. Britain has devised a contingency plan for a Northern Rock bailout, in the event...   (Associated Press)
Customers line up outside a branch of British bank Northern Rock PLC in Croydon, south London, in this Friday, Sept. 14, 2007 file photo. Britain has devised a contingency plan for a Northern Rock bailout,...   (Associated Press)
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Great Britain • credit crisis • subprime mortgages • Gordon Brown • Richard Branson • Alistair Darling • Northern Rock • Virgin


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