what should happen to northern rock?

Former Member

personally the priorities are

1. getting the money loaned to them back

2. keeping trust in banks up

3. keeping depositors' savings safe

i don't think the government should care about shareholders, simply because when the company does well the shareholders get the benefits, as they had for 10 years - and like any investment it can collapse

i also don't think the government should care about the 6000 jobs, simply because 6000 jobs isn't worth 24 billion pounds of debt, it'd be better spent retraining and providing tax breaks for new businesses in the affected areas

i say cut off the funding and let it collapse and be broken up and the government get's what it's owed and the savers get their money back, and the loan book gets sold on - the bank's funding model collapsed, that's a lesson in capitalism

Former Member

Print 24 billion pounds in notes.

Put Allastair Darling on top.

Set on fire.

i say cut off the funding and let it collapse and be broken up and the government get's what it's owed and the savers get their money back, and the loan book gets sold on - the bank's funding model collapsed, that's a lesson in capitalism

it would be a lesson in dodgy monetary policy

Former Member

I find it rather amusing (not) that the government could not bail out all those people who got fuck hard by the Farepak scandal- people who invariably were of limited means in the first place- but it is jumping at the chance of bailing out the savers, investors and shareholders of Northern Rock. I wonder who is in greater need of help...

Former Member

Aladdin wrote: »

I find it rather amusing (not) that the government could not bail out all those people who got fuck hard by the Farepak scandal- people who invariably were of limited means in the first place- but it is jumping at the chance of bailing out the savers, investors and shareholders of Northern Rock. I wonder who is in greater need of help...

Very true... Although, most NR shareholders are apparently small investors, many too are NR workers. (And I don't think Labour will let NR collapse, that's a lot of jobs in pretty solid Labour areas that would go). Furthermore a bank has not collapsed for a very long time, I don't think any govt wants to preside over the collapse of a bank...

I think NR will probably be nationalised (as some ppl have called for). Shareholders would moan (like they did with Railtrack) because they'd get a v.low price for their shares compared to what they were...But, hey, shares are always a risk.

Former Member

NR will be broken up it's just a matter of time, darling's still trying to save face and can't admit he's thrown taxpayer money down the drain, more news out recently that 70% of NR's mortage portfolio is actually owned by an offshore trust, so BOE will have to fight it out with other creditors to get part of their loan back......what a shambles.

Former Member

The only realistic option is to sell Northern Rock to another company. JC Flowers, for instance, has been quite keen to buy it, as has Virgin and Richard Branson. Why can't the government sell to one of these? Apparently, they've been moaning that no one's able to pay back more than £15billion to the taxpayer immediately. Who cares? At least that £15billion returned. Put it into administration, they lose the lot. Alistair Darling, who disgracefully is still the Chancellor at the time of writing, should "get a grip", as George Osborne observed.

wheresmyplacebo wrote: »

i also don't think the government should care about the 6000 jobs...

I wonder if you'd be saying the same thing if you worked for Northern Rock.

Former Member

Cut off the funding? Are you mental? Do you even understand how this borrowing works and the process is behind it?

The funds are there for this purpose, it's not the first time it's happened, plenty of banks have requested these funds over the past couple of years.

Yes this case is worse, but NRK has enough of a good book and customers to see it through, and plenty of interest in a takeover. I don't see why you're worrying tbh.

Former Member

CheeseOnToast wrote: »

Cut off the funding? Are you mental? Do you even understand how this borrowing works and the process is behind it?

The funds are there for this purpose, it's not the first time it's happened, plenty of banks have requested these funds over the past couple of years.

Yes this case is worse, but NRK has enough of a good book and customers to see it through, and plenty of interest in a takeover. I don't see why you're worrying tbh.

this borrowing that gets more unlikely of being paid back everyweek, why should the government bail out a company which can't repay it's debts?

it should be left to the other banks to tear it apart, how it should work - it's mortgages can be sold on, and people who had deposits have had them secured by the government, so the only losers are shareholders in the bank, which is a risk you take in shares

especially as it moves 70% of it's profit making to an offshore company too £25billion can create far more than 6000 jobs, and it could buff up the railways nicely too

Former Member

wheresmyplacebo wrote: »

this borrowing that gets likely of eing to be paid back anytime, why should the government bail out a company which can't repay it's debts?

it should be left to the other banks to tear it apart, how it should work - it's mortgages can be sold on, and people who had deposits have had them secured by the government, so the only losers are shareholders in the bank, which is a risk you take in shares

:yes: