Government plan hit a Northern Rock

clipped from www.telegraph.co.uk Another £3bn at risk in Northern Rock Another £3bn of taxpayer money has been put at risk in Northern Rock after the nationalised lender's off-balance sheet funding vehicle, Granite, was put in to run-off yesterday. Northern Rock triggered the £37bn vehicle's wind-up by breaching rules on the size of cushion provided by the nationalised bank to Granite's institutional bondholders. By declining to transfer any more mortgages into Granite, the lender reduced its collateral below the contractual 8.2pc minimum.

"The percentage of delinquent loans relative to the value of mortgages in the trust rose above pre-set levels. Three different arrears triggers have been breached - remember how Brown and Darling blatantly lied that the taxpayer's money was secured by the mortgage assets of the bank?" thus writes Guido Fawkes. Seeing as how he has been closer to the facts than this government has had the courage to announce, it suggests that matters will get worse for longer than Labour predicts.