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Part of Northern Rock to be sold in 2009

In a move which is effectively "robbing Peter to pay Paul" the UK government is looking at plans to sell off parts of the Northern Rock to raise around £2 billion for the budget coffers. Despite the fact that literally billions upon billions of pounds are still owed by Northern Rock, to the UK taxpayer, the UK government is desperate to raise as much funding as possible in the short to medium term.

There are rumours circulating Parliament that the government is looking at the possibility of splitting the bank into it a "good bank" and "bad bank" with the "good bank" being sold off to investors while UK taxpayers retain ownership of the "bad bank". One of the main problems with this particular exercise is the fact that the UK mortgage market and the UK financial sector in general is still in the doldrums and the government is unlikely to receive a "fair value" for the "good" side of the business.

There's also the problem of the UK taxpayer being left with the less attractive business, loans and mortgages which would at best delay the repayment of outstanding debts and at worst put the current repayment plan at risk.

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