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WTF Headline of the Day: Britain nationalizes mortgage lender Northern Rock

Holy crap!

Britain nationalizes mortgage lender Northern Rock   

Britain said on Sunday it will nationalize ailing mortgage lender Northern Rock (NRK.L) for a temporary period as it was not in the taxpayer's best interests to sell it to the private sector now.

"In the current market conditions we do not believe the two proposals deliver sufficient value for money for the taxpayer," Finance minister Alistair Darling told a news conference. "So the government has decided to bring forward legislation to bring Northern Rock into a temporary period of public ownership."

A consortium led by billionaire Richard Branson's Virgin Group (VA.UL) had been the front-runner, ahead of an offer led by the bank's management team. Both were told last week to improve their offers because neither offered taxpayers a good enough deal.

Other headlines:

Northern Rock to Be Nationalized By UK Government (Bloomberg)
UK nationalises mortgage lender Northern Rock (Reuters)
Northern Rock to Be Nationalized (Wall Street Journal)

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Sunday, February 17, 2008 | 12:08 PM | Permalink | Comments (27) | TrackBack (0)
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Comments

Great.

What does "value for money for the taxpayer" mean? I thought that the earlier UK govt guarantees for Northern Rock were limited to some additional backing of deposits with the bank? (in other words that there was no explicit public ownership of all Northern Rock's liabilities?)

Or is this just a polite way of saying "we didn't think the taxpayer was getting screwed sufficiently hard, so we went for the most irresponsible, morally backward thing we could possibly do?"

Posted by: andrew | Feb 17, 2008 12:23:23 PM