Northern Rock Nationalisation - How Will This Affect You?
This ends a period of speculation of private takeovers or buy outs and seems to end the possibility of the Rock being sold off, wound down or broken up.
However what will the latest development in the Northern Rock crisis mean for it's stakeholders? Northern Rock Savings Account Holders Now that the Rock is in effect owned by the UK Government any savings deposited with the Bank are now backed by the state.
Ironically this means they are now one of the safest places your money could be.
This is very different to the situation a few months ago where some customers were sleeping outside branches overnight in a bid to get their savings out of the bank for fear they would lose the lot should the Bank go in to receivership.
In addition over the last few months as the crisis has evolved the bank has been offering high interest rates in a bid to attract or even retain savers money.
The money of savers is vital as it relies on this capital base to lend out in mortgages.
In conclusion if you have savings currently deposited in a ROck account it is most likely in a good place! Northern Rock Mortgage Holders Shareholders are probably the least affect by the nationalisation.
Borrowers will still have to pay their mortgage off whoever is the ultimate owner.
The only slight difference is that if you fail to pay it will be the government repossessing your home, instead of a PLC.
Shareholders Shareholders in the Northern Rock have had a torrid time over the past years or so.
The value of Rock Shares has fallen from about have been hit worst by the crisis.
This time last year their shares were worth just over £11 and on Friday, before the shares were suspended they were worth a meagre 52 pence.
The tough decision of how much Northern Rock shareholders will eventually be paid as compensation by the government is to be decided by a government appointed panel.
Whatever the final amount it is sure to be disappointing to shareholders and the prospect of appeals and legal action are more thank likely.