UK government to sell bank assets

In UK, chancellor George Osborne has signalled that the government would start selling off its massive banking assets starting with Northern Rock.

The chancellor used his annual Mansion House speech to insist it was time for the taxpayer to plan the exit of the government from the sector. He also came out with plans for regulatory tightening, with the creation of "firewalls" around banks' retail arms.

Osborne admitted that over the past year, corporate UK had faced a series of domestic and international "headwinds."
However, pointing to the encouraging unemployment data released yesterday, he insisted the economy was improving.

The sale of Northern Rock, a potent symbol of the turmoil caused by the credit crunch, would demonstrate a return of confidence to the banking sector, he said. It was also "an important first step in getting the British taxpayer out of the business of owning banks," he added.

A number of firms, including Sir Richard Branson's Virgin Money, the Coventry and Yorkshire building societies, investment groups NBNK and Olivant and Tesco Bank have evinced interest in Northern Rock.

Osborne said: "Images of the queues outside Northern Rock branches were a symbol of all that went wrong, and its chaotic collapse did great damage to Britain's international reputation.