Resignation in British press over B&B deal

September 29, 2008

, LONDON, September 29 – The expected nationalisation of British bank Bradford & Bingley sparked dismay in Monday\’s newspapers that taxpayers will again have to bail out failing financial institutions.

"Another weekend of fevered negotiations, another emergency bail-out of a crippled bank… another lousy deal for the British taxpayer," said the populist Daily Mail.

There was general support for the government\’s swift action in dealing with B&B after its share price plunged last week, compared to the months of "dithering" over Northern Rock, which was nationalised earlier this year.

Stronger was the condemnation for the bank\’s business model, which centred on giving mortgages to people to buy property to rent out, as well as clients who did not give proof of their income — loans now seen as extremely risky.

"By any definition, Bradford & Bingley… has been badly run," said the Financial Times, which called for an "orderly wind-up" of the bank.

Under the deal reported early Monday, the government will take over the mortgages and sell off the savings business of the bank to Spain\’s Santander.

"Taxpayers must risk billions for Bradford & Bingley," headlined The Times, noting that the only good news was that, after B&B and HBOS — taken over earlier this month –, no other British banks were left likely to collapse.

The right-leaning Daily Telegraph said the deal would make taxpayers liable for more than 150 billion pounds worth of potentially toxic mortgage debt, and called for more accountability in drawing up such agreements.

"As the government commits more and more of our money to the financial lifeboat, it is high time the taxpayer had a say in how it is constructed," it said, adding that parliament should be recalled.

The left-leaning Guardian noted that with the bailout of Wall Street institutions agreed by US leaders Sunday, the mergers of various banking giants and several nationalisations, the financial order was "in transition".

"A run of bankruptcies, fire sales and hastily arranged marriages has shifted the parameters of the possible," the newspaper said.

"Full-blooded capitalist institutions — once so insistent on their autonomy — are now running to the state for shelter."

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