THE GUARDIAN: The frantic search for a private sector solution to the Northern Rock crisis has been widened to include cash-rich governments in the Middle East.
Goldman Sachs, the investment bank brought in by the government to find financing for a takeover of the stricken bank, has widened the net as the deadline for potential bidders approaches. Alistair Darling, the chancellor, has told Goldman that the government has no objections in principle to so-called sovereign wealth funds being included in any financing solution.
There is no current indication that a deal has been clinched but the Treasury believes it is sensible for the sovereign wealth funds to be approached, given that they have accumulated vast cash reserves after the fourfold increase in the price of oil over the last five years. The main players in the region are the Abu Dhabi Investment Authority and the Qatari Investment Authority.
These Middle Eastern states, as well as wealthy governments in Asia, have already helped to prop up the US banking sector, which has been badly hit by the subprime mortgage crisis. The Abu Dhabi Investment Authority has poured billions into the US bank Citi, while Beijing has taken a stake in its rival Morgan Stanley. Search for Middle East cash to rescue Northern Rock >>> By Jill Treanor and Larry Elliott
Mark Alexander (Paperback)
Mark Alexander (Hardback)
