Move to Nationalize UK Bank Sparks Fury

Shareholders expected to battle public ownership
By Peter Fearon,  Newser Staff
Posted Feb 18, 2008 3:48 AM CST
A sign is seen outside a branch of Northern Rock in London, Monday Jan. 21, 2008. Britain's Treasury chief Alistair Darling outlined a plan to nationalize the bank Sunday (AP Photo/Matt Dunham)   (Associated Press)
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(Newser) – Furious shareholders concerned about the risk to their investments are blasting the British government's decision to nationalize ailing Northern Rock bank. The British Treasury is expected to face lengthy legal action from investors once the government formally announces details of the takeover today. Trading in bank shares is being suspended, and the government takeover could be completed within the week. Taxpayers have already forked over billions of dollars to prop up the troubled financial institution.

“The only reason the government has chosen nationalization is because it offers better value to the taxpayers," said the director of the UK Shareholders Association. "This is equivalent to a thief telling you it's a better value to him to steal from you than to enter into a commercial transaction with you.” The government rejected rival offers from private groups because officials believed the deals required too much public subsidy and posed too great a risk for taxpayers.