Bradford and Bingley: British government nationalises second failing bank

The second such nationalisation after Northern Rock, the B&B is Britains largest buy to let (BTL) mortgage lender and faced bankruptcy. The Labour government organised the bailout on behalf of powerful financial interests without any public discussion, after private talks over the weekend with banking chiefs and regulators.

Darling said that nationalisation was necessary after B&Bs share price had fallen to 20p, down from a high of £5.20 only two years ago, raising the spectre of a run on the bank that might spread throughout the banking system.

We had to stabilise the situation in order to protect the banking system as a whole, he said, insisting that Britain would do whatever it takes.

Prime Minister Gordon Brown also made it clear that he would intervene to protect the City. He said, The governor of the Bank of England, the chancellor and I will take whatever action necessary to ensure continued stability.

This is a pledge to use the money of hard-pressed working people, whose wages have for years been held down at the behest of big business and the City, to protect the wealth of the financial oligarchynot just in this instance but in future bankruptcies.

The chancellor used his powers acquired under the emergency banking legislation to enable the nationalisation of Northern Rock, Britains fifth largest mortgage lender, last February. The legislation permits him to circumvent normal bankruptcy law and transfer a bank to another bank or take it over, with as much or as little compensation as he thinks fit.

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