If this report from the Telegraph is true then the deal to buy Northern Rock includes 250 million from the bank's own balance sheet i.e. money the bank owned before it was sold is being used to buy it.
The government would make terrible pawn brokers and indeed have a poor record at nationalisation. If Northern Rock did operate with 'excess capital' then why did that excess capital not belong to the taxpayer instead of being used to reduce the price Virgin money paid?
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