Rock judgement day delayed
There’s been a bit of creative thinking at the Treasury to improve the prospects of a commercial solution to the Rock’s ailments.
It has made its own financial adviser, Goldman Sachs, available to the Rock, to find funding for the troubled bank that would replace some of the £26bn of taxpayer-backed loans.
And if Goldman succeeds in raising, say, £11bn or so of bank finance, well those facilities would be made available to either of the Rock’s putative rescuers, Olivant and the consortium led by Virgin.
Which means that Olivant and Virgin are now on a wholly level playing field, especially since the Rock has agreed to reimburse Olivant’s expenses – in the way it had already agreed to do with Virgin.
That should reassure the Rock’s shareholders, many of whom feared Olivant was getting short shrift from the bank’s board.
The timetable for Goldman to report back on whether the money can be raised is mid January. Which, by implication, is the date at which the Rock would be nationalised, if neither Goldman or Olivant or Virgin succeeds in procuring substantial committed facilities from private-sector sources.
So the Treasury and the Rock have bought a bit of time. And all of us as taxpayers can perhaps take a little comfort that if this bank is ultimately nationalised, the commercial alternatives will have been explored and weighed in a rational and proper way.