This from the BBC
Under the arrangement, the government will take control of the bank's £50bn in mortgages and loans. Shares in the company have been suspended.
B&B's £20bn savings business and branch network will be bought by rival Abbey, which is in turn owned by Spanish banking group Santander
The question now is where all this will end.Will the B&B be the last or the next in what will be a long line?
The government is once again taking a chunk of debt to its balance sheet.This time it is the mortgages in the buy to let sector where speculators jumped on the rising property market bandwagon only to see their costs rising and their property portfolio value falling.
The hope for the government is that in the longer term,they will vbe able to sell this portfolio back at a profit to the taxpayer when the mortgages have been paiid down and the property market recovers.
Alsitair Darling is convinced that the hard work over the weekend had no alternative.Speaking on the today programme earlier he said that
The government was taking quick, decisive action , to let Bradford & Bingley go down would have been very destabilising - every developed country in the world is seeing a problem
The Economist points out that
This is the fourth British bank to have crumpled in the face of ongoing turmoil in the credit markets. Northern Rock was nationalised in February and both HBOS, Britain’s biggest mortgage lender, and Alliance & Leicester, a small bank, have since sought refuge in takeovers by bigger banks amid worries that they would not be able to raise new loans to repay existing debts.
And unlike many of the problems,this was basically down to bad management and not a result of the American credit crunch.The strategy of chasing the buy to let market was incorrect as the bank was trying to find itself a niche in the lending sector
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