We have all heard of the Northern Rock crisis and now it seems, thanks to P.M. Gordon Brown, it has been saved.
He has nationalized the bank whose aid package from public funds is estimated at 57 billion pounds. (about 114 billion U.S.. dollars.)
The Northern Rock crisis began when depositors started a run on the bank as a result of the credit crunch sparked by default on U.S. sub-prime mortgages market.
In terms of the British economy, the Prime Minister said the economy has been tested many times since 1997.
Gordon Brown contributed Northern Rock's collapse to an "unsound business plan."
He said that the banks problems had not spread to other institutions, which could show that the tripartite system was "Working well."
The tripartite means: The Government, Financial Services Authority and The Bank of England.
Prime Minister Gordon Brown has said that:
I guarantee the loans made to Northern Rock are backed by its assests."
Alister Darling, the Chancellor said:"We are absolutely right to intervene in the Northern Rock crisis and we will take time to consider the best future for Northern Rock."
Alistair Darling spoke positively about the economy, saying it is growing well with high employment and low inflation.
I agree, it is right that they interevene.