Britain Nationalizing Bank For First Time In 25yrs

News of an emergency loan to Northern Rock from the Bank of England last September triggered the first run on a British bank in more than a century. The government has been trying since then to find a buyer for the bank that would enable the £25bn in Bank of England loans to be repaid. Shares in the bank, which closed at 90p on Friday, will be suspended on Monday morning and shareholders can expect virtually no compensation for their equity. Mr Darling said the legislation to be brought to parliament on Monday would appoint independent arbiters to determine what the shares were worth, but the legislation would propose that the government should not be required to compensate shareholders for any value that is dependent on taxpayers’ support. The government’s move stunned shareholders, who were last night considering action. Jon Wood of the SRM hedge fund, the bank’s biggest shareholder, said: “This is a very sad day for the stock market, banking industry and the reputation of the UK as a financial centre.” ... http://www.ft.com/cms/s/9ba3c422-dd6e-11dc-ad7e-0000779fd2ac.html

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