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The Bill was also sufficiently widely drawn to allow the nationalisation of any financial institution, leading to the concern that other banks might be in financial difficulty. [4] Following the nationalisation of Northern Rock, the Act allowed for the nationalisation of the mortgage and personal loan book of Bradford & Bingley on 29 September ...
If the bank was to be temporarily nationalised, the government would manage the bank at "arm's length" on a commercial basis, where services for savers and borrowers would not be affected and the company would continue to operate as normal. However nationalisation would also address the future of the Northern Rock Foundation. [58]
Nationalization may produce other effects, such as reducing competition in the marketplace, which in turn reduces incentives to innovation and maintains high prices. In the short run, nationalization can provide a larger revenue stream for government but may cause that industry to falter depending on the motivations of the nationalizing party.
Economist Paul Krugman has argued for bank nationalization: "A better approach would be to do what the government did with zombie savings and loans at the end of the 1980s: it seized the defunct banks, cleaning out the shareholders. Then it transferred their bad assets to a special institution, the Resolution Trust Corporation; paid off enough ...
A proposal was made that banks like Citigroup be brought under a conservatorship model similar to Fannie Mae and Freddie Mac, that some of their "good assets" be dropped into newly created "good bank" subsidiaries (presumably under new management), and the remaining "bad assets" be left to be managed under the supervision of a conservatorship ...
After the nationalisation of banks, the branches of the public sector banks in India rose to approximate 800 percent in deposits, and advances took a huge jump by 11,000 percent. [4] Nationalisation also resulted in a significant growth in the geographical coverage of banks; the number of bank branches rose from 8,200 to over 62,000, most of ...
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Recapitalisations of the other two banks mentioned were expected by the end of March 2009 but, according to Taoiseach Brian Cowen, were expected to be finalised in early February 2009 at a total of €7 billion. [4] The nationalisation of Anglo Irish Bank on 21 January 2009 followed two more resignations earlier that month.