Top-level talks are continuing ahead of the British treasury’s announcement that Bradford & Bingley, a troubled mortgage bank, is to be nationalized, according to the Times of London.
B&B is in discussions with the so-called Tripartite Authority — the treasury, Financial Services Authority and the Bank of England — over the potential bailout. The British government plans to hold an immediate fire sale to sell off B&B’s assets to one or more banks, and although the treasury would only say that discussions were “ongoing,” an announcement will come later tonight or early tomorrow morning before the stock exchange opens.
Although the Financial Services Authority is trying to find a single white-knight bidder to take over B&B’s loans in their entirety, Britain’s big banks refused to get involved. The Spanish banking giant Santander is in talks about its potential role in the rescue, with HSBC also possibly featuring.
Alistair Darling, the chancellor, had been keen to try to avoid an expensive takeover that would cost the taxpayer billions. It is understood that most of B&B’s approximately $90 billion in loans, including $77 billion of home mortgages, will not be sold and will be nationalized on a long-term basis.
British Prime Minister Gordon Brown, who met President George Bush in Washington on Friday in the midst of the Wall Street crisis, returned to Britain yesterday to be briefed on the B&B situation.Click here to read more from the Times of London.