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B&B taken under government wing

This morning Bradford & Bingley has been nationalised in part as a result of an inability to meet regulatory requirements.

The deal, secured by the Treasury and Financial Services Authority last night, will see the Treasury take control of the remaining mortgage and personal loan books, wholesale liabilities and the relevant staff and headquarters.

Abbey will take over depositor and saver accounts and B&B retail branches.

The Financial Services Compensation Scheme has paid out around 14bn to ensure the protection of B&B’s retail deposits.

It has paid Abbey 4bn to ensure the safety of the remaining deposits not covered by the FSCS.

The Bank of England has been called in to fund the transfer by the FSCS which will be paid for by the wind up of B&B.

A release says the move was triggered by poor investor and lender confidence, likely sparked by growing speculation around the longevity of the business.

B&B owns Mortgage Express, the nation’s largest buy-to-let lender, and will no longer offer new mortgage products.

Last week it announced it would slash 370 jobs connected to mortgage processing and begin a review of head office and central staff.

Alistair Darling, chancellor of the exchequer, says: “The first way of redeeming the costs that we are incurring comes from redeeming the assets of B&B.

“If that isn’t enough, then there will be a claim under the compensation scheme. What I am making absolutely clear today, is that I have no intention of collecting that money in the immediate future.”


Saving the housing market

It was billed as part one of Prime Minister Gordon Brown’s autumn comeback but the government’s package of measures to save the housing market met with a muted industry response. Although trade bodies such as the National Housing Federation and the Council of Mortgage Lenders welcomed the measures initially, any enthusiasm was dampened by the government’s failure to address the lack of mortgage availability crippling the market.

FSCS to give £14bn to protect B&B deposits

The Financial Services Compensation Scheme is contributing £14bn to allow retail deposits held by Bradford & Bingley to be transferred to Abbey.

Time for a new approach to asset allocation

Trevor Greetham, RLAM’s head of multi asset, introduces the recentlylaunched RL GMAPs. Asset allocation has become an increasingly difficult challenge for investors and advisers in the years since the financial crisis. Sometimes violent price swings in stock and commodity markets coupled with the collapse in the rate of interest on bonds have made it harder […]


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