Northern Rock shares resume trading
Updated on 20 November 2007
Share trading in the beleaguered mortgage lender resumes after being suspended temporarily earlier this morning.
Bailing out Northern Rock was the right thing to do, the chancellor insisted on Monday, as he defended his handling of the crisis.
Alistair Darling said he wanted to protect the interests of depositors and taxpayers when considering the future of the bank.
As the treasury admitted that some of the £24bn in emergency loans may never be repaid, the Conservatives accused the chancellor of incompetence and confusion.
Shares in Northern Rock tumbled more than 20 per cent today as it emerged that the rescue bids received so far are well below its market value.
Another rock bottom day for Northern Rock, amid the swirl of competing interest groups, all of whom are applying pressure in different ways on Alistair Darling to look after their needs as government support for the stricken bank approaches £25bn.
The only ones who can feel safe are the customers who hold deposits at the Rock, as so far the government has fully guaranteed their savings.
When Northern Rock was swept away in a bank run in the middle of September, the expectation had been a swift gobbling up by a larger UK bank.
That has not happened. Instead an array of private equity funds, and other financial groups are lodging very low bids for the Rock. News of that today saw Northern Rock's share price slump a further fifth to just over £1 per share, compared with £12 in February.
Furthermore, it is also becoming apparent that even these low bids assume continuing massive loans from the treasury, creating a dilemma for the chancellor.
