From The BBC:
The Building Societies Association (BSA) has opposed the UK government’s plan to split the nationalised Northern Rock bank into two parts.The government wants to separate the bank’s lending operations from its past loans and bad debts. The BSA says if the lender is reorganised this way it will have an unfair advantage over its rivals. The criticism is contained in a submission to the European Commission which is scrutinising the plans. The BSA says the government’s guarantee to the Northern Rock’s savers, which came into place when it faced a run on its funds in 2007, should also come to an end. In its submission to the EU on 31 July, the BSA argued that splitting the Northern Rock into a good bank (BankCo), and a bad bank (AssetCo) holding most of the Rock’s old mortgages, would put building societies at a big disadvantage. “The proposed BankCo firm will have a very strong position in the mortgage market, as its initial balance sheet has no or few non-performing loans,” the BSA said….