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18/12/2007
Northern Rock Gets Taxpayer Billions
The Government is bailing out troubled bank, Northern Rock, again.
At the request of the lender, it has offered to cover any loss by financial institutions that provide money to Northern Rock so the bank can operate normal banking services.
The Treasury has already guaranteed savers' deposits held at Northern Rock after September saw the UK's first run on a bank in living memory.
The move risks being seen as taking the bank a step closer to nationalisation.
It will also lead to greater financial exposure for taxpayers, who have already lent Northern Rock an estimated £26bn.
This means that other financial institutions that have lent money to Northern Rock will now have their loans guaranteed.
The government would prefer a commercial solution for Northern Rock, but an 'auction process' has been thrown into doubt recently, though two high-profile suitors remain, including preferred bidder Virgin Group.
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.
The Treasury said it would extend its existing agreement to cover the bank's wholesale obligations and borrowings to other financial institutions.
It said the agreement related to agreements "existing or arising in the future".
Northern Rock ran in difficulties during the recent credit crunch.
Unlike most banks, which rely on savers' deposits to fund mortgages and other loans, Northern Rock borrowed heavily in credit markets.
But banks become nervous about lending cash to each other amid fears over exposure to the US housing market slump.
This forced Northern Rock to seek emergency funding from the Bank of England in September, news which sent some customers rushing to withdraw their savings.
(BMcC)
At the request of the lender, it has offered to cover any loss by financial institutions that provide money to Northern Rock so the bank can operate normal banking services.
The Treasury has already guaranteed savers' deposits held at Northern Rock after September saw the UK's first run on a bank in living memory.
The move risks being seen as taking the bank a step closer to nationalisation.
It will also lead to greater financial exposure for taxpayers, who have already lent Northern Rock an estimated £26bn.
This means that other financial institutions that have lent money to Northern Rock will now have their loans guaranteed.
The government would prefer a commercial solution for Northern Rock, but an 'auction process' has been thrown into doubt recently, though two high-profile suitors remain, including preferred bidder Virgin Group.
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.
The Treasury said it would extend its existing agreement to cover the bank's wholesale obligations and borrowings to other financial institutions.
It said the agreement related to agreements "existing or arising in the future".
Northern Rock ran in difficulties during the recent credit crunch.
Unlike most banks, which rely on savers' deposits to fund mortgages and other loans, Northern Rock borrowed heavily in credit markets.
But banks become nervous about lending cash to each other amid fears over exposure to the US housing market slump.
This forced Northern Rock to seek emergency funding from the Bank of England in September, news which sent some customers rushing to withdraw their savings.
(BMcC)
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03 August 2010
Northern Rock Steadfast In Recovery
The boss of a once beleaguered UK bank is "encouraged" by news that nationalised Northern Rock's - a so-called 'bad bank' - has returned to profit following heavy losses last year in the wake of a bail-out by the taxpayer in 2008. Chief Executive Gary Hoffman said the Northern Rock 'AM' results were 'encouraging'.
Northern Rock Steadfast In Recovery
The boss of a once beleaguered UK bank is "encouraged" by news that nationalised Northern Rock's - a so-called 'bad bank' - has returned to profit following heavy losses last year in the wake of a bail-out by the taxpayer in 2008. Chief Executive Gary Hoffman said the Northern Rock 'AM' results were 'encouraging'.
24 February 2010
Northern Rock Closer To Independence
Northern Rock has reached an "important milestone" in its return to independence, the UK Treasury said today. According to the government, the bank has stepped closer to "commercial strength" with notice given for the end of the special guarantee on retail deposits. The deposits will be lifted three months from today on close of business 24 May.
Northern Rock Closer To Independence
Northern Rock has reached an "important milestone" in its return to independence, the UK Treasury said today. According to the government, the bank has stepped closer to "commercial strength" with notice given for the end of the special guarantee on retail deposits. The deposits will be lifted three months from today on close of business 24 May.
18 November 2011
Northern Rock Sale 'Poor Judgement' – Labour
Labour's Shadow Minister for the Treasury has said the sale of Northern Rock on Thursday by the Government was a 'poor judgement'. Richard Branson's Virgin investment company announced it was to purchase the almost disastrous Northern Rock bank on Thursday, while it has since emerged the sale will be at a loss for the taxpayer.
Northern Rock Sale 'Poor Judgement' – Labour
Labour's Shadow Minister for the Treasury has said the sale of Northern Rock on Thursday by the Government was a 'poor judgement'. Richard Branson's Virgin investment company announced it was to purchase the almost disastrous Northern Rock bank on Thursday, while it has since emerged the sale will be at a loss for the taxpayer.
26 March 2008
FSA Admits 'Failings' Over Northern Rock
The UK financial watchdog, the Financial Services Authority, has admitted to failings in its handling of the crisis at Northern Rock. A review into the supervision of Northern Rock, carried out by the FSA's internal audit division, identified four key failings in the watchdog's handling of the crisis.
FSA Admits 'Failings' Over Northern Rock
The UK financial watchdog, the Financial Services Authority, has admitted to failings in its handling of the crisis at Northern Rock. A review into the supervision of Northern Rock, carried out by the FSA's internal audit division, identified four key failings in the watchdog's handling of the crisis.
01 May 2008
Job Cuts Planned At Troubled Bank?
Troubled lender Northern Rock plans to axe 2,000 jobs within three years, it has been reported. The bank has been struggling since last year due to unsettling financial conditions sparked off by the global credit crunch. Long queues formed outside the bank last September as savers tried to withdraw their savings.
Job Cuts Planned At Troubled Bank?
Troubled lender Northern Rock plans to axe 2,000 jobs within three years, it has been reported. The bank has been struggling since last year due to unsettling financial conditions sparked off by the global credit crunch. Long queues formed outside the bank last September as savers tried to withdraw their savings.
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Northern Ireland WeatherToday:It will be cloudy again throughout the day. Mainly dry in the morning, but patchy drizzle in places, becoming more widespread and persistent in the afternoon. Freshening southwesterly winds. Maximum temperature 12 °C.Tonight:Cloudy with a spell of heavy rain pushing south through late evening and the early hours, followed by some clear spells. Minimum temperature 6 °C.
