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Financial services
Bradford & Bingley
Following turbulence in global financial markets in the summer of 2008, Bradford & Bingley (B&B) found itself under increasing financial pressure. Investors and lenders lost confidence in its ability to carry on as an independent institution.
On Saturday 27 September 2008, the Financial Services Authority (FSA) determined that B&B no longer met its requirements, or ‘threshold conditions’, and was likely to fail to meet its obligations to depositors. On Monday 29 September 2008, the Treasury exercised its powers under the Banking (Special Provisions) Act 2008 to transfer B&B into public ownership. Immediately after this transfer, the retail deposit book and branch network were transferred to Abbey National plc (now Santander) following a competitive process.
The swift action taken by the UK Authorities – the Treasury, Bank, and FSA – was believed to offer the best means of protecting depositors, maintaining financial stability and minimising the exposure to taxpayers. UKFI is now responsible for managing the Government’s stake in B&B.
In March 2010, the previous Chancellor announced that Northern Rock (Asset Management) and B&B would be integrated under a single holding company – UK Asset Resolution – which is wholly owned by the Treasury. Work is progressing on the integration, which will enable synergies to be realised across the two companies, providing value for money to the taxpayer.
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