Government nationalises B&B
The government has confirmed that it has taken troubled mortgage lender, Bradford and Bingley, into public ownership and sold on its savings business and branch network to Spanish bank Santander.
This means that all the rest of Bradford & Bingley's business, including its mortgage operations, have been taken into public ownership by the government, using the Banking Special Provisions Act 2008.
In a statement to the London Stock Exchange, Bradford & Bingley's board said: "With the transfer of our savings business to Santander, savings customers can be confident that their money is secure in a well funded bank.
"Mortgage customers should continue to make payments as usual. Both the savings business and mortgage operations will continue to operate as normal through these changes and branches, ATMs and online accounts will all be operating as usual."
Bradford & Bingley has experienced a tough year, with its share price down 90% over the past 12 months. Its inability to find a larger bank to buy it has left it adrift in the banking crisis, with consumers increasingly concerned that it may go bust - taking their money with it.
As a result of its weakened state, on Saturday 27 September the Financial Services Authority decided it could no longer meet its conditions to be a retail bank, leaving the Treasury with little choice but to take it under public ownerhip.
Meanwhile, over in the US, politicians have agreed a $700 billion mortgage bail-out, that will see the government use taxpayers' money to buy 'bad' debt off banks and reduce their exposure to risky assets. The rescue package will now be sent to Congress to be voted on.
President George Bush claimed last week that if Congress did not approve the plans, the US economy would enter a very long and deep recession. But opponents argue that by bailing out failing financial institutions it would seriously increase the already soaring budget deficit, and cost each US taxpayer around $5,385.
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