Northern Rock's "bad bank" has been merged with Bradford & Bingley(B&B)in a single holding company to try to improve taxpayer returns.
UK Asset Resolution (UKAR) will run the closed mortgage books of both B&B and Northern Rock Asset Management (NRAM), and could one day be sold off alongside the "good" part of Northern Rock, which has begun selling new mortgages again.
An "executive team" of members stripped from the former boards of each company will run UKAR in a bid to maximise value for taxpayers.
UKAR says the team's mandate is to ensure both companies continue to treat customers fairly, deliver high levels of service and support customers facing financial difficulty.
But the holding company is not authorised or regulated by the FSA and customers will continue to be serviced through the subsidiary businesses of B&B and NRAM.
Bradford & Bingley was nationalised in 2008, but its savings books were sold to Santander. Northern Rock, also taken over by the Government that year, was split into a "good" and "bad" bank in 2009.
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