Tuesday, Dec 18, 2007
Pour it on Don't worry you'll get it back
BBC: Treasury extends Rock guarantees
The Treasury has extended financial guarantees to Northern Rock at the request of the troubled lender.
It has offered to cover any loss by financial institutions which provide money to Northern Rock so the bank can operate normal banking services.
Posted by holding out @ 11:59 AM (436 views) Add Comment
2 Comments
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1. little professor said...
"What this means is that other financial institutions that have lent money to Northern Rock will now have their loans guaranteed," said BBC business editor Robert Peston."Plainly Northern Rock feared that there would effectively be a meltdown if that they didn't get this guarantee," he added.
"This is not very far in my view from actual nationalisation."
The Treasury's announcement means that most of Northern Rock's balance sheet is now covered by government guarantees.
This technically takes the gross exposure of the taxpayer to more than £100bn.
2. cyril said...
I don't really get this.
NR's loans are secured against people's houses. Since NR is now virtually nationalised, presumably it means that NR mortgage holders live in state-owned housing? Is this Chairman Brown's cunning master plan?