Friday, Oct 12, 2007
Taxpayer will take hit of NR sub-prime losses
Guardian: Treasury underwrites ailing bank's bailout
Economists estimate Northern Rock borrowings from the Bank have increased by £2.3bn in seven days and total about £12.9bn. It emerged yesterday that, after urgent requests from the ailing lender for a loosening in lending terms, Treasury officials earlier this week secured a deal that enabled the Bank to relax its collateral requirements - a move that governor Mervyn King had previously opposed. Terms on the Bank's replacement facility allowed Northern Rock to put up "all of its assets" as collateral, including its £7.8bn of unsecured loans.
Posted by uncle chris @ 08:39 AM (629 views) Add Comment
11 Comments
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1. tyrellcorporation said...
I read this morning that Alastair Wellbeloved Smithers-Darling (actual name) has admitted he has a Northern Rock mortage... slight conflict of interest?!?
2. paul said...
There's some explaining to do there for sure. There isn't really a conflict of interest unless he's received unusually favourable terms, but why should taxpayers have to foot the bill for Adam "The Hood" Applegarth's excesses?
3. cornishman said...
This treasury 'deal' stinks
4. Seanb303 said...
they are effectively buying cdo's with taxpayers money
5. iguana said...
Was it not Victor Kyam that liked a razor so much that he bought the company?
6. tyrellcorporation said...
Either that or the Remington Fuzz-Away - An inspired invention for all those suffering unnecessary pillage...
I swear by mine!
7. Mark said...
well you know what to do if you dont like it
http://petitions.pm.gov.uk/NoCityBailout/
8. mrmickey said...
I think this whole affair demonstrates how fragile the UK's banking system is. If it were robust they would let this dog of a bank go bust but they won't because the gates of hell would be opened.
9. dohousescrashinthewoods said...
I heard a soundbite on radio 4 this morning of an MP yesterday giving Darling a hard time for the bank being in "government administration" - great to see MPs agree with the assessment voiced here, the govt being challenged and state radio broadcasting it.
10. vfr said...
The treasury can tell the bank what to do if in the public interests and by extreme economic circumstances. top of page 12. Is this what the act is supposed to be about
the rub i sthough that this order has to be put before parliamant and approved within 28 days otherwise it ceases to exist.
Probably why the tories are supporting the measure. non support would bring the country to it's knees.
http://www.bankofengland.co.uk/about/legislation/1998act.pdf
11. paul said...
It's hardly extreme circumstances.
If the bank goes into administration, the bosses get fired, the savers lose some money (if they were daft enough to keep it in there) and the FSA and BofE get bloody noses for being stupid and lazy enough not to see it coming.
It's about saving face rather than extreme economic circumstances.