What will happen to Northern Rock?
Which are disappearing faster, wondered Jeff Randall in The Daily Telegraph, “taxpayers’ funds in Northern Rock or their bank details from HM Revenue and Customs?”.
Chancellor Alistair Darling has clocked up exposure of up to £40bn by agreeing to guarantee its deposits and pour money into it.
What next for Northern Rock?
It looks as though none of the potential bids for Northern Rock offer to take over the entire bank or repay the Bank of England immediately, said Nils Pratley in The Guardian.
Bidders “could make a mint for themselves and remove a political headache”, but “might return for further state loans if their plans don’t work out”. Taxpayers’ money could be at risk for years. And imagine the damage to the Government, said Randall, of allowing the buyer “to convert the pain of the public purse” into private profit.
Another option is putting Northern Rock into administration. That would be “politically unpalatable”, said The Guardian, triggering widespread redundancies and again testing the public’s fragile confidence in the banking system.
It should be nationalised, said Anthony Hilton in the Evening Standard. Public money would still underwrite it, but at least any profits would come back to the taxpayer. Or else it could at least be wound down in an orderly fashion, said The Guardian. All the options for Northern Rock are “unappetising”, but nationalisation is “the least distasteful”.
