NATIONALISATION of Northern Rock announched yesterday has created the prospect of a Guernsey bank being owned by UK taxpayers. In turn, this suggests that something owned by the UK Government will be regulated locally by the Guernsey Financial Services Commission.
Treasury minister Lyndon Trott declined to comment and commission director-general Peter Neville could not be contacted.
Chancellor Alistair Darling announced that the troubled bank had been taken into public ownership temporarily after a story by the BBC.
Northern Rock (Guernsey), launched in February 1996, is a wholly-owned subsidiary of the main UK bank.
Mr Darling announced the move after rejecting two private offers, one led by Sir Richard Branson’s Virgin Group, because they did not offer sufficient value for money to the taxpayer.
Instead he opted for nationalisation - the first such move since the 1970s.
Conservative shadow chancellor George Osborne said his party opposed the move, calling it a catastrophic decision.
Northern Rock got itself into difficulties in September because it was unprepared for the global credit crunch and was forced to ask the Bank of England for emergency funding.
The bank has assured customers that it is business as usual, that their savings are secure and branches will be open at the normal time.
Shares in Northern Rock are suspended this morning.
Under nationalisation rules, shareholders will be offered compensation for their holding, at a level set by a Government-appointed panel.
Anyone unhappy with that could take legal action.
UK taxpayers are now subsidising the bank to the tune of about £55bn.
Loading ...
Share this article:
What are these?