The UK just bought itself a bank.

For a cool estimated £55-£100 billion of the taxpayer’s money, the UK government is to nationalise failing UK bank Northern Rock.

Northern Rock got into severe trouble late last year and had to borrow colossal ammounts of money from an emergency facility at the Bank of England. This in turn caused a failure of confidence in the bank by it’s depositors and a bank run.

The UK Labour government has now apparently decided that the taxpayer’s exposure to Northern Rock is so massive that they have no choice but to nationalise the bank in order to attempt to get back some of the money they have taken.

There had been various private takeover offers for the bank including one lead by Richard Branson’s Virgin group but they failed to materialise. It appears that the already hired former boss of Lloyd’s of London will be installed at Northern Rock to take control.

Whether there is any salvage to be had and whether the taxpayer will lose their money remains to be seen.

One would imagine that the UK chancellor, Darling, will now be about as popular with the British taxpayers as flatus in an elevator.

Update: Full details of the assets and shares nationalisation is to follow tomorrow (18th Feb)

Photo Credit: Alex Gunningham cc-by-2.0