How Bad Is Northern Rock?

Pundits examine the fallout of unavoidable nationalization
By Jason Farago,  Newser Staff
Posted Feb 19, 2008 1:08 PM CST
How Bad Is Northern Rock?
A Northern Rock clock outside of a branch of the bank in Newcastle, England, Monday, Feb 18, 2008. British Prime Minister Gordon Brown has said that stricken mortgage lender Northern Rock will remain nationalized until adverse market conditions change, and that the bank will be run at arms length from...   (Associated Press)

The subprime crisis has forced the British government to do what it dreaded: nationalize a bank. What's the fallout from the Northern Rock takeover?

  • Gordon Brown "put quite a good face" on an unpalatable decision, says Philip Stephens of the Financial Times. Nationalization hasn't hurt him much, but the dithering has. Result: An election is probably years away.

  • Polly Toynbee, in the liberal Guardian, says, "Labour only did what any responsible government would do—but then, politics isn't fair."
  • In the right-leaning Telegraph, Rachel Sylvester writes that Brown looks "like the foolish man who built his house on sand." He should watch out if he tries to scapegoat chancellor of the exchequer Alistair Darling.
  • In the Independent, Steve Richards applauds government ownership—"it could hardly be managed more poorly." The real fallout will not be about nationalization but about oversight: how could this happen in the first place?
(Read more Northern Rock stories.)

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