Northern Rock may be Nationalised

[jacks_mum]

what does this mean please?

 

[Tinkerbee]

ermm...not sure...does it mean owned by Gov. instead of shareholders?

damn business a level

 

[ivenoidea]

Basically if I remember rightly the Bank of England can only lend as an emergency for a maximum of six months. Unfortunately nobody else wants to risk taking on all of Northern Rocks high risk mortgage business. Therefore the Government is stuck with the only option of nationalising it. i.e. the mortgage holders will effectively have to repay the nation and the government (i.e. the tax payers) underwrite the risk,

This should reassure the remaining depositers that they do not need to make a run on the bank and so risk destabilising the banking sector. Shareholders may get some compensation but probably not a lot as basically it is an unsound institution anyway.

Apols if I'm a bit wrong on this as I haven't followed it too closely. Stock market experts please correct me.

 

[WFL]

I think it means us chumps (AKA taxpayers) are going to pay for their incompetence.

 

[brighteyes]

Got it in one. If you have shares in the company and also pay tax, you are paying for the privilege of owning your own shares twice.

 

[Pedantic]

Let me explain, when the boys in the city get it right our interest rates stays as they are and we get screwed for 25 years and it's called a mortgage, they get a new porche, when they get it wrong our interest rates go up and we get screwed again and they keep their old 12 month old porche for an extra few months, if your a bank and you get it right you make a real killing screwing the public and get paid a mint, if your a bank and get it wrong we the public pay bail you out and you get a pay off to go away with early retirement.