Nationalisation of Northern Rock in the event that the takeover bids fail. On 12 January 2008, the Treasury recruited Ron Sandler, the former Lloyd's of London Chief Executive, to lead Northern Rock, in the event that the bank was nationalised. 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. Alistair Darling rejected the possibility of the Bank being put into administration.
Nationalisation of Northern Rock difficulties banks faced over the summer of 2007 in raising funds in the money market. The bank's assets were always sufficient to cover its liabilities in the long run, but it had a liquidity problem because institutional lenders became nervous about lending to mortgage banks following the US sub-prime crisis. Bank of England figures suggest that Northern Rock borrowed £3 billion from the Bank of England in the first few days of this crisis. With shares in Northern Rock plummeting by nearly a third, the British Government moved to reassure investors with the bank, with account holders urged not to