Another UK mortgage bank in trouble?

Whilst the PM says he will support any financial package in Washington before knowing the detail, back at home there is another reminder of that part of the Credit Crunch which is made in Britain. Talk on the BBC suggests some people are seriously considering another nationalisation.

Please give us a break. Taxpayers cannot afford the last bank they bought for us, and we certainly don’t want to go collecting them. Under EU rules any newly nationalised bank would have to stop new lending to avoid offering subsidised competition. It is bad enough to have lost Northern Rock’s lending to the market, without losing another one.

Nationalising is the worst option. It means sacking more staff, running down the business and sending taxpayers a large bill for all the losses. It means fewer mortgages, lower house prices, and more uncovered lending. It means deepening the crisis. It means debauching the government accounts. By all means strengthen deposit protection. By all means act behind the scenes to help a private sector solution, but do not promise to buy it or take it over.

This entry was posted in Blog. Bookmark the permalink. Both comments and trackbacks are currently closed.

6 Comments

  1. Acorn
    Posted September 27, 2008 at 12:37 pm | Permalink

    Would you buy it John? The Treasury nor the BoE can find a bank in Europe that wants it. I expect a sweetener will turn up from the taxpayer. The US has set the pattern now for these fire sales.

    Some bedtime listening for Redwoodians:-
    http://www.financialsense.com/Experts/2008/Noland

    [the mp3 file downloads quicker, don't forget to turn your volume up]

  2. Kit
    Posted September 27, 2008 at 1:08 pm | Permalink

    Having the nationalisation option means any private buyer has to pay a higher price. If the B&B board think they can negotiate a better deal from the government than a private buyer they will hold-out for nationalisation. This government has taken moral hazard to an all new level.

  3. Nick
    Posted September 27, 2008 at 1:13 pm | Permalink

    So you believe that we should just let the B&B crash and work on the consequences after it's too late? If it crashes all jobs would be lost and it would send the market into yet another tail spin, with them look for the next victim!

  4. Brian
    Posted September 27, 2008 at 3:42 pm | Permalink

    You are spot on as per usual however journalists seem to prefer listening to the drivel of Vince Cable instead. Come on John do us all a favour and get out there and fight the free markets corner.

  5. Johnny Norfolk
    Posted September 27, 2008 at 3:54 pm | Permalink

    I totaly blame Labour and Brown in particular for letting it get to this state. He then has the cheek to start spouting in the U.S. about what needs to be done. Pathetic.

  6. michael, islington
    Posted September 27, 2008 at 10:19 pm | Permalink

    I note your name is being taken in vain by many commentators for your report last year which urged radical deregulation of the financial sector, including the mortgage industry.

    Indeed, a Conservative panellist on this week's Question Time, faced with an allegation by another panelist over the wisdom of your recommendation, was anxious to state that the party had definitely rejected your policy.

    How do you plead?

    Reply: This site and the Report refutes this Labour drivel.

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

  • John’s Books

  • Email Alerts

    You can sign up to receive John's blog posts by e-mail by entering your e-mail address in the box below.

    Enter your email address:

    Delivered by FeedBurner

    The e-mail service is powered by Google's FeedBurner service. Your information is not shared.

  • Map of Visitors

    Locations of visitors to this page