Decision on future of Northern Rock in six weeks: Report
The future of ailing British bank Northern Rock - including possible nationalisation - is to be decided in the next six weeks, finance minister Alistair Darling said in an interview out Saturday.
By Agencies |
LONDON: The future of ailing British bank Northern Rock - including possible nationalisation - is to be decided in the next six weeks, finance minister Alistair Darling said in an interview out Saturday.
"We want the bank to come back before the middle of February," the Chancellor of the Exchequer told the Financial Times amid growing speculation that no private bidder will be able to raise the capital to buy out the bank.
Northern Rock, hit by the squeeze on the global credit markets after the US subprime mortgage sector crisis, was forced to apply for emergency funding from Britain's central bank the Bank of England in September.
That prompted thousands of worried investors to queue at branches of the mortgage lender to withdraw their savings, with a subsequent knock-on effect on consumer confidence in the banking sector.
Northern Rock - propped up by at least 25 billion pounds (33 billion euros, $49 billion) of taxpayers' money - is talking to two potential bidders: Richard Branson's Virgin Group and the private equity firm Olivant.
But the process is dragging on, as the bidders struggle to find financial backing to reimburse part of the money borrowed from the Bank of England.
Prime Minister Gordon Brown told his monthly news conference in December that the government's preferred option was a private sale but did not rule out nationalisation, saying "all options were on the table".
In a sign Darling wants to force the pace, he said a decision would be made soon after US investment bank Goldman Sachs, which was brought in by the government to see if a private purchase was viable, reports in mid-January.
The chancellor unveiled proposals Friday to give Britain's financial watchdog more powers to intervene in failing banks to avoid a repeat of the crisis, after accusations that intervention was not swift enough.
"We want the bank to come back before the middle of February," the Chancellor of the Exchequer told the Financial Times amid growing speculation that no private bidder will be able to raise the capital to buy out the bank.
Northern Rock, hit by the squeeze on the global credit markets after the US subprime mortgage sector crisis, was forced to apply for emergency funding from Britain's central bank the Bank of England in September.
That prompted thousands of worried investors to queue at branches of the mortgage lender to withdraw their savings, with a subsequent knock-on effect on consumer confidence in the banking sector.
Northern Rock - propped up by at least 25 billion pounds (33 billion euros, $49 billion) of taxpayers' money - is talking to two potential bidders: Richard Branson's Virgin Group and the private equity firm Olivant.
But the process is dragging on, as the bidders struggle to find financial backing to reimburse part of the money borrowed from the Bank of England.
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Prime Minister Gordon Brown told his monthly news conference in December that the government's preferred option was a private sale but did not rule out nationalisation, saying "all options were on the table".
In a sign Darling wants to force the pace, he said a decision would be made soon after US investment bank Goldman Sachs, which was brought in by the government to see if a private purchase was viable, reports in mid-January.
The chancellor unveiled proposals Friday to give Britain's financial watchdog more powers to intervene in failing banks to avoid a repeat of the crisis, after accusations that intervention was not swift enough.
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