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Delay with nationalisation caused losses

Delay with nationalisation caused losses

Category: Banking

Updated: 18/09/2012
First Published: 18/09/2012

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The Permanent Secretary to the Treasury, Sir Nicholas Macpherson, has claimed the Government should have nationalised Northern Rock sooner following its taxpayer bail-out.

Sir Nicholas stated that the losses of around £2 billion suffered by the taxpayer could have been reduced if the Government had intervened in the period between the bank's initial bail-out in September 2007 and its eventual nationalisation in February 2008.

Speaking before the Public Accounts Committee, the head of the Treasury said: "There was a five month period of drift and that, I think, made it quite likely that we would lose money on Northern Rock in a way that it certainly wasn't inevitable at the point we took a majority holding in RBS."

"The damage which was done on Northern Rock, I think, goes back to 2007-2008.

"By which I mean that with the benefit of hindsight, and this is hindsight, the Treasury was slow off the mark in terms of addressing the problem."

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