Northern Rock: You Break It, You Bought It

Apparently the Pottery Barn rule — you break it, you bought it — applies to subprime-afflicted banks as well as to irritatingly aspirational home-thingie stores. Case in point: Tonight’s story from the Telegraph about one possible outcome for badly-busted U.K. mortgage bank Northern Rock:

The U.K. government has drafted a bill that could see mortgage bank Northern Rock nationalized as early as February if it can’t strike a deal to be bought, according to a report in the Telegraph newspaper Wednesday. The government is seeking the support of opposition parties so the bill could be pushed through in a single day, the newspaper said.

That’ll teach you savings-happy U.K. bank customers to make a run on a failing bank: We’ll nationalize the damn thing and then you taxpayers will own the mess. Excellent.

[via MKTW]


  1. Colman Stephenson says:

    Actually the UK tax paper pretty much owns the mess already as its lent the bank approx $50billion. Currently there is no workable plan to get that paid back.
    All of the current offers on the table (including the preferred bid from Richard Branson) leave the ‘white knights’ with the government-supported upside and the tax payer with the downside.
    As The Economist puts it “This newspaper has, to put it mildly, never been a fan of nationalisation. But with Northern Rock this increasingly looks like the least bad option from a taxpayer’s point of view (unless a credible buyer appears). And, in any case, the damage is half-done: in effect the state already owns a chunk of it.”

  2. Joe Pilgrim says:

    Here America’s busted rock…