Consumer Law

One Option: Nationalization

By Alan White

By Alan White

The British government decided Sunday to nationalize Northern Rock, the troubled U.K. mortgage bank, rather than permit its sale to private investors. Northern Rock, a mortgage lender that relied heavily on securitization, faced a classic bank run in August when its depositors learned of its precarious financial position. (More background on the Northern Rock collapse.) In his comments to the press, PM Gordon Brown credited this bold approach with protecting the U.K. from experiencing the financial meltdown now facing U.S. markets. While there have been proposals in the U.S. for various sorts of bail-outs of insurers and mortgage investors, I am not aware of any proposals to nationalize Countrywide.

Full post as published by CL&P Blog on February 18, 2008 (boomark / email).