UK Prime Minister Defends Decision to Nationalize Troubled Mortgage Lender
In defending his decision to nationalize mortgage lender Northern Rock PLC, United Kingdom's Prime Minister Gordon Brown stated on Monday that this the best option for the U.K. taxpayer and that the company will be sold back to the private sector "as soon as possible".
The U.K. government Sunday announced it had decided to take full control of the Northern Rock, in a surprise move that reflects the depth of the global credit crisis.
Mr. Brown stated that the U.K. government has secured stability and the protection of savers with its plans to nationalize the company. "Stability is our watchword ... to protect savers and the taxpayer," he said to reporters at his regular monthly press conference. Northern Rock will be "run at arm's length from the government ... until adverse conditions change," he added. "We will, and always have, put the interests of the tax payer first."
"We did the right thing, at the right time for the right reasons," Mr. Brown told a news conference. "We have contained the problems. It has not spread across to the rest of the economy."
Both Mr. Brown and U.K. Chancellor of the Exchequer Alistair Darling stressed that the nationalization of the bank was a temporary measure, with the government planning to sell the company when the time was right. "Obviously we want a stronger company that we can pass on to the private sector as soon as possible," Mr. Brown said.
Published on February 18, 2008
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