Virgin bid for ailing bank, but temporary nationalisation is still the best option
Northern Rock has confirmed that it has chosen a consortium led by Sir Richard Branson's Virgin Group as its preferred buyer for the stricken bank. Virgin's offer - which has been backed by the Treasury - includes an immediate repayment of £11bn of the £25bn the bank owes the Bank of England. However the Liberal Democrats have repeated calls for the Government to take over control of Northern Rock, arguing that although a private buy out of Northern Rock which guaranteed that all tax payers' money would be repaid with interest within a fixed time period would be the most desirable course of action, this seemed highly unlikely, and as such temporary nationalisation is needed. Acting leader Vince Cable today called for trading in the bank's shares to be suspended. In a letter to Bank of England Governor Mervyn King, he has also asked for reassurances about the security of the loaned money and the interest rate being charged.
