Skip to: Content
Skip to: Site Navigation
Skip to: Search

December 2, 2008 10:39:50 AM CST

Learn about Newser Points »

« Back to the grid | Next story »

UK Nationalizes Northern Rock

Posted Feb 17, 08 12:52 PM CST in World,  Business 

(Newser) – British ministers plan to nationalize Northern Rock as part of a bold, desperate move to rescue the struggling bank, the BBC reports. Chancellor of the Exchequer Alistair Darling said two private bids to take over Northern Rock failed to offer “sufficient value for money to the taxpayer,” adding that London would only hold onto the bank until market conditions improve.

The government takeover could result in job cuts, analysts say. Taxpayers are already subsidizing the bank with loans and other guarantees valued at $107 billion. Shareholders will be compensated for their holdings, but they could sue if they’re unsatisfied with the government-set price, notes the BBC, whose business editor called nationalization “a dirty word associated with industrial failures.”

Sources BBC, Bloomberg

0 comments | Print E-mail | Digg Seed this on Newsvine Add this link to Del.icio.us StumbleUpon

Related Newser Stories

  • How Bad Is Northern Rock?

    Feb 19, 08 1:08 PM CST
    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.
    More »

  • Nationalization May Loom for Northern Rock

    Feb 13, 08 12:00 PM CST
    Nationalization May Loom for Northern Rock 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 »

  • Northern Rock Bailout Plan a Money Shuffle

    Jan 21, 08 2:21 PM CST
    Northern Rock Bailout Plan a Money Shuffle 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 »

  • Northern Rock Boss Quits as Fall Continues

    Dec 13, 07 7:54 AM CST
    Northern Rock Boss Quits as Fall Continues 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 »

People walk pass a branch of Northern Rock bank in London. Chancellor of the Exchequer Alistair Darling said the U.K. government will nationalize Northern Rock Plc after negotiations to sell the struggling...   (Associated Press)
A sign is seen outside a branch of Northern Rock in London. Chancellor of the Exchequer Alistair Darling said the U.K. government will nationalize Northern Rock Plc after negotiations to sell the struggling...   (Associated Press)
Northern Rock is to be nationalised as a temporary measure, Chancellor Alistair Darling has said. Neither of the two private proposals to take over the beleaguered bank offered "sufficient value for money...   (Associated Press)
Chancellor of the Exchequer Alistair Darling said the U.K. government will nationalize Northern Rock Plc after negotiations to sell the struggling mortgage lender to a private company failed, Bloomberg...   (Associated Press)
Chancellor of the Exchequer Alistair Darling said the U.K. government will nationalize Northern Rock Plc after negotiations to sell the struggling mortgage lender to a private company failed, Bloomberg...   (Associated Press)
« Prev« Prev | Next »Next » Slideshow
Our editors also recommend:

Threads (
1
 of 3)

Tags

United Kingdom • Richard Branson • Bank of England • Alistair Darling • Northern Rock • nationalization • Virgin Group • taxpayers


Loading...

Premium Articles from HighBeam

Find more articles like this

Today's Most Popular

Loading...

Other Business Stories

What is Newser?

2008 Codie Finalist

Face it: there's too much news. At Newser a team of editors and writers culls the most important stories from hundreds of U.S. and international sources and reduces them to a headline, picture, and two paragraphs. It's the Newser guarantee: we can take any report or column or video and pack what you need to know into 120 words or less. Newser's short-form aggregation, visual format, and unique information tools help you get more of the kind of news you want, in a quicker and more entertaining way. And we do it 24/7—you can come back morning, noon, night (and in between) for something new that matters. Read less, know more.

Learn more »