Chancellor Alistair Darling told the House of Commons yesterday the Government, as a major creditor and investor in Northern Rock’s future, would have to approve or veto any sale of the beleaguered bank.
His ministerial statement in Parliament came as the bank’s share value dropped 21.4% to a new low of 104.2p after Northern Rock revealed all offers, reportedly counting 10 since Friday’s deadline for expressions of interest, had so far been ‘materially below’ the bank’s closing market value.
Facing the prospect of placing Northern Rock in administration, nationalising the bank or running foul of EU state-aid rules, Darling unveiled a three-point approach:
‘First, to protect the interests of the taxpayer,’ he said. ‘Substantial sums have been lent and this money has to be repaid at an appropriate time and rate. The Government will consider proposals with a view to reaching the best outcome for the public purse.
‘Second, to protect depositors. It is essential to do everything we can both to safeguard their interest and to maintain the service provided to them. And third, to maintain wider financial stability.’
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