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B&B nationalisation 'last resort' Treasury in talks to secure B&B
(about 3 hours later)
Bradford & Bingley should only be nationalised as a last resort, the Lib Dem Treasury spokesman has said. Officials from the Treasury and the Financial Services Authority are in talks with executives from Bradford & Bingley in a bid to secure its future.
Vince Cable said if it was in "serious difficulty" the "best option" would be a takeover by another bank "without any involvement by the taxpayer". B&B's share price has plummeted and it has announced plans to cut 370 jobs due to the downturn in the mortgage market.
But if B&B had to be nationalised the government should step in and "just get on with it", Mr Cable said. Lib Dem Treasury spokesman Vince Cable said nationalisation should be a last resort and the "best option" was a private takeover by another bank.
Gordon Brown refused to comment on speculation about B&B after its share price plummeted to a record low. Gordon Brown refused to comment on speculation about B&B.
On Thursday the lender announced plans to cut 370 jobs. The BBC's business editor Robert Peston said the Treasury, the FSA and B&B were working to find a solution over the weekend to put the bank on a more stable footing before markets opened on Monday morning.
Full nationalisation, which could well include merging B&B with Northern Rock, was very much a last option - not impossible, but the final resort if all else fails, he said.
David Cameron has said he wants to give the Bank of England sweeping new powers to rescue failing banks.David Cameron has said he wants to give the Bank of England sweeping new powers to rescue failing banks.
Details of the plan, which is designed to stave off the threat to B&B and prevent a repeat of the Northern Rock crisis, will be outlined at the Conservative Party conference on Monday.Details of the plan, which is designed to stave off the threat to B&B and prevent a repeat of the Northern Rock crisis, will be outlined at the Conservative Party conference on Monday.
Northern Rock merger? 'Don't faff'
All three of the main credit ratings agencies have downgraded B&B's creditworthiness, citing its problems raising funds and the excessive exposure of its mortgage book to buy-to-let and self-certified borrowers. Mr Cable said it was imperative that whatever the solution for B&B, it must be decisive and there should not be a repeat of the delays following the crisis at Northern Rock. I just hope this time the government doesn't faff around for four or five months getting this sorted out Vince CableLib Dem Treasury spokesman class="" href="http://www.bbc.co.uk/blogs/thereporters/robertpeston/">Robert Peston: How will B&B be rescued?
But Richard Pym, the recently-appointed chief executive, insisted the bank was "strongly capitalised" and was "fit for purpose going forward".
The BBC's business editor Robert Peston said the Treasury, the Financial Services Authority and Bradford and Bingley were working to find a solution over the weekend, to announce before markets opened on Monday morning.
Full nationalisation, which could well include merging B&B with Northern Rock, was very much a last option - not impossible, but the final resort if all else fails, he said.
I'm not going to comment on any individual company or building society Prime Minister Gordon Brown Robert Peston: How will B&B be rescued?
Mr Cable said it was imperative that whatever the solution, it must be decisive and there should not be a repeat of the delays following the crisis at Northern Rock.
"If the bank is in serious difficulty, the best option is if it were taken over by another bank and without any involvement by the taxpayer," he said."If the bank is in serious difficulty, the best option is if it were taken over by another bank and without any involvement by the taxpayer," he said.
"But the speculation in the national newspapers is that that won't happen and in which case it will effectively be nationalised, and that's what a takeover of Northern Rock actually means."But the speculation in the national newspapers is that that won't happen and in which case it will effectively be nationalised, and that's what a takeover of Northern Rock actually means.
"I just hope this time the government doesn't faff around for four or five months getting this sorted out and just gets on with it.""I just hope this time the government doesn't faff around for four or five months getting this sorted out and just gets on with it."
Mr Cable said depositors should not panic because their money would be guaranteed by the government under the Financial Services Compensation Scheme. All three of the main credit ratings agencies have downgraded B&B's creditworthiness, citing its problems raising funds and the excessive exposure of its mortgage book to buy-to-let and self-certified borrowers.
But Richard Pym, the recently-appointed chief executive, insisted the bank was "strongly capitalised" and was "fit for purpose going forward".
And Mr Cable said depositors should not panic because their money would be guaranteed by the government under the Financial Services Compensation Scheme.
The prime minister was asked about B&B during his visit to New York for a UN development meeting.The prime minister was asked about B&B during his visit to New York for a UN development meeting.
He said: "I wouldn't comment, and nobody would expect me to comment, on these speculative statements that are made in newspapers.He said: "I wouldn't comment, and nobody would expect me to comment, on these speculative statements that are made in newspapers.
"I'm not going to comment on any individual company or building society.""I'm not going to comment on any individual company or building society."
In a speech to the UN, Mr Brown called for an end to "the age of irresponsibility" in the global financial sector.In a speech to the UN, Mr Brown called for an end to "the age of irresponsibility" in the global financial sector.