UK Nationalizes Northern Rock

Deal pays back government loans, but public still on the hook

(NEWSER) - The British government today unveiled its last-gasp plan to hand off the Northern Rock hot potato and prevent nationalization, the London Times reports. Under the plan, the bank would immediately pay back the £25 billion it owes the government by selling the debt to private investors as bonds. But since the government is backing the bonds, taxpayers are still on the hook if the Rock defaults. More»

Pundits examine the fallout of unavoidable nationalization

(NEWSER) - The subprime crisis has forced the British government to do what it dreaded: nationalize a bank. What's the fallout from the Northern Rock takeover?

• Gordon Brown "put quite a good face" on an unpalatable decision, says Philip Stephens of the Financial Times. Nationalization hasn't hurt him much, but the dithering has. Result: An election is probably years away.

Branson's Virgin bid for troubled bank needs improvement, UK gov't says

(NEWSER) - Troubled British mortgage lender Northern Rock’s share price plummeted 8% today as rumors of government nationalization grew after the Treasury panned rescue plans offered by Richard Branson's Virgin Group and a competing version from the bank’s management team, the BBC reports. Though shareholders reportedly prefer management's bid, the government favors Virgin’s plan—if it sweetens the deal. More»

$570M writedown posted; sale of troubled bank months away

(NEWSER) - The CEO of collapsing British bank Northern Rock quit this morning without comment, reports the Financial Times. Adam Applegarth resigned last month but had pledged to stay on as CEO until the end of January to guide the struggling company through its upcoming sale. But investors are troubled by the slow speed of the transaction, with Applegarth taking the blame. More»

Exploiting the public's discontent with banks, Virgin could bid for Northern Rock

(NEWSER) - Capitalizing on public disgust with Britain’s big banks, Richard Branson plans to launch an Internet bank through subsidiary Virgin Money that will take deposits and offer mortgages, the Guardian reports. Branson is talking to investors and some US banks about financial backing and could set in motion more ambitious plans to acquire Northern Rock if the government decides to sell part of it back to the public before 2010 elections. More»