Northern Rock split 'could leave taxpayers with £2bn bill'

[Aurora]

The Guardian - 18/05/12

Taxpayers face losses of at least £2bn on the continued state ownership of Northern Rock, the National Audit Office (NAO) has concluded as it raises questions about the decision by the Treasury to split the Newcastle-based bank in two in 2009.

The lender was split into Northern Rock plc, which resumed lending and was sold to Virgin Money at the start of this year, and Northern Rock Asset Management, the "bad bank" which remains in public hands.

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"Thanks guys"

[PS_RalphW]

What I don't understand is that the 'bad bank' contains all the dodgy sub-prime loans, which the private banks wouldn't touch. Yet the government is assuming all these loans will be paid off on schedule.

$2B? pull the other one.

[cubes]

If it's only £2bn they we could be celebrating in the streets.

[SleeperService]

This came up last evening. One of my fellow guests was in *anking and his opinion is to double that number and then put a zero behind it

Apparently the full cost won't become apparent for a few years yet. All those that can remortgage will do so leaving the most likely failures with NRAM.

Govt i.e. US get the bad debt while the better risks are siphoned off to the BAU crowd.

Why do I keep thinking of automatic weapons?