It should come as no surprise to learn that Alistair Darling (Chancellor) has laid out plans to nationalise Northern Rock, later this month, and sell off the assets.
His only/last hope of reprieve will be if the private sector bids for the Rock actually come to fruition. However, these look increasingly less likely as:
1 There is a £100M black hole in the pension fund
2 The shareholders are doing their best today to play ostrich, and stop any private sector takeover, in the vain and misguided hope that the bank is worth more than a few pennies. It is not, the previous board oversaw the destruction of this bank in much the same way as Simpson et al destroyed Marconi.
As and when the bank is nationalised, the assets will be sold off piecemeal and the hapless taxpayers will be out of pocket by at least £50M. Britain's reputation as a world class financial centre will take a tremendous knock.
So who is to blame for this mess, who should be held accountable?
In my view the following should be held accountable:
1 The previous board, whose greed and egos led them to ride roughshod over common sense and good banking practice by skewing the bank's risk portfolio heavily into the danger zone.
2 The FSA for being asleep at the wheel, and not stepping in sooner to stop the destruction of the bank.
3 The Prime Minister, whose dithering over the "non general election" caused him to hold Darling back from intervening in this fiasco earlier.