As expected, Northern Rock (or to give it its more formal title, Northern Wreck) is to be nationalised.
After months of dithering, Gordon Brown and his sidekick Alistair Darling have reluctantly been forced to conclude that the only way to safeguard taxpayers' money is to nationalise the bank.
Sharedealing has been suspended.
The government claim that it would seek to compensate Northern Rock shareholders based on the value of their shares. This "value" will be "independently" determined.
Darling has said that:
"The principles for assessing that compensation would be based on the company not receiving public support and that all specific financial assistance from the Bank of England or government had come to an end."
However, given that the bank is nothing but a dead corpse without the government supplied crutches, the "value" of the shares will be pretty close to zero. As I warned on this site some time ago, the shares are as worthless as Marconi shares.
Congratulations to the ex board of directors of Northern Rock (for their greed), and to Brown and Darling (for their dithering) for destroying a once fine institution!