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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

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

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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