United Kingdom Asset Resolution Limited (UKAR)

Aidan Lawson ()
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Aidan Lawson: YPFS, Yale School of Management, https://elischolar.library.yale.edu/journal-of-financial-crises/

Journal of Financial Crises, 2021, vol. 3, issue 2, 641-664

Abstract: As the Global Financial Crisis began to unfold, the United Kingdom (UK) saw two of its largest mortgage lenders in Bradford & Bingley (B&B) and Northern Rock begin to weaken dramatically under the pressure that housing and financial markets were facing. Northern Rock and B&B both faced severe funding problems due to a worsening global credit crunch and both would be nationalized in 2008. Despite this effort, the crisis continued to worsen globally, and the UK government created UK Asset Resolution Limited (UKAR) on October 1, 2010. This organization's goal was to wind down and maximize the return on the GBP115.8 billion in mortgages and other assets that the government still had from B&B and what was now Northern Rock Asset Management. The government transferred those assets to UKAR along with B&B's and NRAM's associated liabilities, including loans from HM Treasury and the Financial Services Compensation Scheme (FSCS) with a principal of GBP48.7 billion at the end of 2010. UKAR has been able to consistently reduce its balance sheet and turn a profit every year since its inception. As of June 2019, the company made approximately GBP8.1 billion in profit, as well as paying off the entirety of its government loans. More recently, the company also sold off all of its assets and equity interest, thus ending government ownership of B&B and Northern Rock in February 2021.

Keywords: UK Asset Resolution; UKAR; United Kingdom; Resolution; asset management companies; AMCs; broad-based asset management (search for similar items in EconPapers)
JEL-codes: G01 G28 (search for similar items in EconPapers)
Date: 2021
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