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UK government overcharged Northern Rock by £445 million

It has been revealed that the UK government overcharged Northern Rock by a massive £445 million on the interest charged against the taxpayer loan to the company. The revelation that the UK government charged a "premium" interest rate on the loan has shocked many in the city and while there had been hopes of a repayment of around £150 million to Northern Rock, the true figure has now been revealed.

It would appear that the European Commission is at the centre of this particular row over the overcharge and has yet again flexed its muscles as it attempts to take on the European financial markets. If nothing else, the ongoing taxpayer loan bailout of the UK banking sector has shown that the UK government has given away substantial power to the European commission and is now paying the price.

The £445 million will be repaid to Northern Rock prior to the split into a "good bank" and a "bad bank". However, it is highly likely that Northern Rock will require additional taxpayer funding to complete the restructuring of the business and eventually sell on the good bank and the bad bank to independent third parties.

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