The LibDems have called for shares in Northern Rock to be suspended due to the volatility in share price being seen in response to developments over the lender’s future.
Acting leader Vince Cable says “spivs and sharks” in the City are taking enormous positions on the share price at the expense of small shareholders.
Northern Rock shares jumped as high as 135p today, after opening at 70p, in response to the announcement that a consortium led by Virgin was having discussions on an “accelerated basis” about taking over the lender.
Virgin is offering to pay back £11bn of the estimated £25bn owed by Northern Rock to the BAnk of England on completion of the deal with a “clear path” to repaying the loan in full.
Cable says: “The Virgin Group is only offering to pay back £11 billion of taxpayers’ money immediately and the other £13 billion of our money is at risk of going up in one of Richard Branson’s balloons.
“It is by no means certain that the Virgin bid will succeed and the Government should look further at temporarily nationalising the bank.”