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Rock: Crumbling less

Robert Peston | 08:49 UK time, Tuesday, 4 August 2009

Northern Rock's losses are a reminder - not that we need them after a recession caused by a banking crisis - that bankers depart from the boring rules of sensible old-fashioned prudent banking at their (and our) peril.

Northern Rock signDuring the boom years, the now nationalised bank took great pride in insisting that it was able to combine a lower-than-average rate of arrears on its mortgages with the systematic practice of providing homebuyers with its notorious Together mortgages - which were worth 80% or 90% or even 100% of the value of the properties customers wanted to own, topped up with personal loans.

Other banks that wouldn't provide such racy 100% and more loan packages were plainly fuddy duddy.

But after months of falling housing prices and rising unemployment, some 3.92% of the Rock's mortgages are three-months or more behind with the payments - compared with just 1.16% at Barclays (which, by no coincidence, remains profitable).

And the Rock has had to take a charge of £602m for the impairment of those home and personal loans.

This charge for loans that are going bad was significantly worse than in the first half of last year, but a little bit better than in the latter half of 2008.

So there are signs that the Rock may be over the worst.

It's now awaiting approval from the European Commission to break itself up - and create a slimmed down bank with fewer of the poor loans in it.

That's a prelude to the privatisation of a re-sculpted Rock.

How far off would such a privatisation be?

Well on the evidence of these figures, many in the City - except those angling for a sale fee - would argue that it would be better not to rush into disposal.

Taxpayers are currently nursing a pretty hefty loss on their ownership of the Rock - though this is not what the chancellor said would be their fate.

The best way to recover that loss is probably to allow Gary Hoffman and his team the time to demonstrate - which is not impossible - that there is an attractive banking franchise hidden beneath those poor quality mortgages and personal loans.

Which may take a good couple of years. Any earlier sale could well deprive taxpayers of full value.

PS. The Rock and the Treasury had said that this bank would do its bit to stem the contraction in the mortgage market by providing £5bn of additional mortgage loans this year.

Because its capital has been so eroded by losses, and because that capital can't be topped up till the European Commission approves the break-up, the Rock will undershoot that target by £1bn.

Which probably makes it a bit harder for ministers to duff up other banks as and when there are allegations that those banks aren't lending enough.

UPDATE, 10:08: I should, of course, point out that the Treasury's policy - now abandoned - of forcing speedy repayment of the Bank of England's emergency loans to the Rock increased the proportion of poisonous loans in the bank's loan book.

Last year the Rock put acute financial pressure on better quality borrowers to transfer their mortgages to other banks. And the Rock was left with those borrowers whom other banks didn't want.

This of course had the effect of increasing the percentage of the Rock's loan-book that's in arrears.

But it should not have had any effect on the absolute level of the charge for loans going bad.

That would have been horrendously large even if the Rock hadn't said cheerio to more credit-worthy customers.


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  • Comment number 1.

    So to all those asking where Barclays profits came from yesterday - well today you have your answer....

  • Comment number 2.

    So much for the suggestion that the taxpayer was going to make a big profit by taking over these failing banks! We always knew that was going to be the case didn't we?

  • Comment number 3.

    All banks have learned a bitter lesson from the last few years.
    But something has been bugging me since about 2002.
    The City seems to be trying to drag us back to 1910. To viscious inequality.
    Back to a land of "haves and have nots".
    A land of ultra-rich and dirt-poor, of "lords and peasants".
    Many of us have talked of revolution and public disorder, but my fear is that the City is forcing the return of something that we all thought we had seen the back of.....the ultra-militant trade union.
    Hard-nosed people who will bring the country, and the City, to a standstill at the drop of a hat.
    That will be our "revolution".
    Are the British public really going to tolerate the return of the "upstairs downstairs" society that the bankers want to force on us?
    Governments need to push moderation on finance-folk....or the "down tools, everybody out" boys will rule again.

  • Comment number 4.

    Isn't the real NR question: Why does it still exist?

    Let us face it, it was worthless a year ago and is just a hole into which taxpayers money is being poured. So what is its point? The Treasury has several other similar institutions on its books so why duplicate the overheads?

    Should we not takes its assets and liabilities into RBS or Lloyds and get rid of this embarrassing name. The name is an open sore in the North East for very understandable and quite justifiable reasons.

    Set up a new bank or building society in the North East so that a new institution can grow and be a source of renewed pride for the region. (indeed perhaps regional banks are the way forward and way out of our national banking catastrophe.)

    Let us face facts: the Northern Rock brand is at best worthless!

  • Comment number 5.

    Good news yesterday from still-independent Barclays -- so be sure to look for something negative to say chaps. Bad news today from government-owned Northern Rock -- so lets put a positive spin on it shall we? Bravo Robert.

  • Comment number 6.

    Robert,(or anyone else on this blog)

    Is it possible for the BBC to produce a timeline of the banking crisis that includes:

    a. Government predictions
    b. Government promises
    c. Actions
    d. Events
    c. Actual outcomes of those predictions and promises

    I can't for the life of me remember what Brownstuff and Darling actually predicted for Northern Rock or anything else. Maybe that was there goal?

  • Comment number 7.

  • Comment number 8.

    There are, if you look hard enough for them, small, local building societies (I have one in Kent) that didn't lend recklessly in the 'good' times and as a result are coping with the banking crisis better than the Casino banks.

  • Comment number 9.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 10.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 11.

    The financial institutions - and regretably some distinguished commentators - are very keen to blame all our economic woes on "irresponsible borrowers", whether it's sub-primers in the US or 125% mortgage freaks in the UK. And they haven't been slow to punish everyone with the alleged "crimes" of these sub-prime outcasts by outrageously raising banking and mortgage costs, not to mention rip-off arrangement fees, for everyone.
    The fact is that the crisis wasn't caused by a few blokes in places like Doncaster with 125% mortgages on 2-bed terraces. In reality there weren't all that many such mortgages. But such mythology is a convenient smokescreen. The crisis was caused by over-speculative, greedy bankers who got paid fat bonuses when they closed deals when they should have been paid reasonable bonuses after those deals had delivered results. But of course the "blame game" dictates that Joe Public should be held responsible for our economic woes and punished financially rather than calling to account - and in some cases jailing - those who really caused the economic mess. Caledonian Comment

  • Comment number 12.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 13.


    A must read article by the Telegraph's Liam Halligan

    'Tories must have the courage to reinstall Glass-Steagall divide'

  • Comment number 14.

    stevewo wrote

    Hard-nosed people who will bring the country, and the City, to a standstill at the drop of a hat.
    That will be our "revolution".

    It is not trade unions thieving and destroying our country, it is those incompetents in the financial sector
    Parrots and lemmings in Whitehall better act fast before the greedy -------- in the city cause, 'The British Revolution'
    We need action now government not impotence.
    Otherwise, I swear to the sky, I for one will never vote again!

  • Comment number 15.

    "Taxpayers are currently nursing a pretty hefty loss on their ownership of the Rock" - but haven't NR paid back a significant amount of the initial loan?

    Any chance of an update to put your comment into context. I'd do it myself, but seeing as you're a journalist and all...

  • Comment number 16.


    "because that capital can't be topped up till the European Commission approves the break-up, the Rock will undershoot that target by £1bn".

    Another reason, as if we needed any, why we should declare independance from a corrupt and, largely, unelected body.

    Local problems need local solutions, just because the financial crisis is widespread that does not meean one size solutions will fit all patients.

  • Comment number 17.

    Browns self delusion that all is bright and beautiful in the free enterprise City is plain to see. Northern Rock is ideally placed to become the exemplary people's bank in public ownership forcing other banks to compete to serve and conduct their business in the interests of both customers and shareholders. Gordon's compulsion is to sell it off asap and miss yet another opportunity to do something useful for ordinary people. They will take their revenge next spring!

  • Comment number 18.

    Well Robert there's a surprise - what's happened to your contact inside the bank to give you advance notice, eh?

    I'm not sure if NR hs reached the worst yet given the worsening mortgage and credit arrears (unemployemnet has still to feed through).

    As has already been alluded to - why is Northern Rock still alive with taxpoayers money? This is a zombie bank. It shouildn't be privatised just run off and closed down.PERIOD.

    As a taxpayer I'd like my money back please. Oh of course I can't because the Government hasn't got any money left has it!

    But don't forget its still taken on the liabilities of all the NR pensions etc....mmmm.....

    If we're talking about bringing the country to a standstill forget the unions.

    Ask every SME to stop passing on the VAT it collects on behalf of the Government (for free) and stop paying NI contribution/taxes. It would take less than 30 days to make the nation bankrupt.

    Now there's a thought. The Government would have to do something pretty sharpish....

  • Comment number 19.

    One of my neighbours 'handed the keys' to his flat back to Northern Rock in January, when he moved out. The flat had already been up for sale for over a year and still is, at a price so far above the current market value that no one has even viewed the place. NR seems to have made no serious effort to sell the flat or rent it out (it's now been empty for over 6 months), to mitigate its losses. This flat is a long way from the North East and in area where there is high demand for flats to rent.
    If this is typical of how NR deals with defaulted mortgages, no wonder it's making such huge losses. Could it be that NR management and staff no longer care, since taxpayers have no choice but to make good any amount of losses they create?

  • Comment number 20.

    So basically the defaulting mortgages are the rump of the British sub prime crisis. All the UK banks participated in this but to varying degrees.

    It is worth noting that both Barclays and HSBC had substantial UK write downs on loans, suggesting that profits are being made on overseas deals. The implication is that until the UK economy picks up, the UK loan book does not look promising.

    When very successful carmakers provide a gloomy outlook, and steel making firms are closing down it is difficult to see how anyone can be optimistic. A couple of months ago, Robert you mentioned that electricity consumption had fallen across the UK. It was the first fall since WW2 I believe - that kind of statistic speaks voulmes and is scary as hell.

  • Comment number 21.


    Is it true the that the reformed Northern Rock bank is intended to be relocated to Las Vegas and will be renamed the 'Golden Nugget Bank' in an effort to revitalise the brand and develop an investment banking off-shoot?

    Who said you can't polish a turd?

  • Comment number 22.

    Ah dear- another mess unravels at Northern Anvil, a rock made out of jelly with borrowed gelatin.

    Many say we need a 'bad loans' bank. We've got one- this is it. The exit strategy should consider a merger between the savings elements of both NR and NS&I.

    The mortgages division will simply have to run the course, noone will touch it. Oh hang on...

    Unless the 'products' (lets call them debt obligations) are packaged with some high quality and some low quality...that might fool buyers who can't figure out what they're buying, then we can just sell them.

  • Comment number 23.


    I just wonder is you ever take any responsibilty for any of this!! I know you were not involved in the business but you were at the front end of any negativity in the banks and anything else that got the general public to start fearing the worse!!!

  • Comment number 24.

    Nothing about the triumvirate or that which shall replace it Robert?

    Northern Rock is a basket case and should have been allowed to fail,

    How much of those losses would have been picked up by the tax payer if it had gone to the wall?

    How many MP's, particularly those in the cabinet had mortgages with Northern Rock?

    Why was it "too big to fail"?

  • Comment number 25.

    3# Stevewo

    You're right about the reinforcement of a have and have-not society. The so-called politics of envy has been replaced by the politics of greed. Nobody even questions why bankers should have bonuses just for doing their job. I don't get a bonus for doing my job. The money comes from somewhere and it is without any doubt from the pockets of the have-nots. Government could do something about it, but they choose not to. The Tories won't be any better. More of the same, I think.

    There is only one solution. Writing reams on this blog is not it. The solution is


    That means - vote for a fringe party, outside the mainstream (but please - not BNP or UKIP). Anything else - even the Raving LOony Party.

    That and that alone will send a message that the British people have had enough and we want democracy (which, by the way, is currently dead).

  • Comment number 26.

    At the risk of being pedantic, your reference to "bankers depart from the boring rules of sensible old-fashioned prudent banking at their (and our) peril" is symptomatic of the general way that politicians and leading commentators like yourself are pulling their punches on these issues. The whole point is that the top bankers and their board's behaviour has been entirely at our peril and not at their own at all. And yet you still manage to couch the issue in terms which fudge the analysis, contributing to an environment in which the policy prescriptions are in turn fudged.

  • Comment number 27.

    #25 economaniac

    Hear, Hear!

    "A much-publicised law designed to stop wealthy tax exiles bankrolling political parties has been quietly dropped until after a general election."

    "The disclosure means that key Labour donors such as Lakshmi Mittal as well as Tory donor Lord Ashcroft will still be able to pump millions of pounds into the forthcoming election campaign, despite promises to curb the influence of wealthy backers." Observer


  • Comment number 28.

    Isn't it strange how the banking disaster has left us in "limboland", a battle between optomism and pessimism.
    In the banks, at the estate agents, at work...everyone with their fingers crossed.
    After such a crazy "boom that never was", we all have to adapt to a quieter way, clutching at straws.
    Is there enough straw to go around?

  • Comment number 29.

    And, by the way - in case anyone swallows the line that the government is powerless to stop bankers' bonuses, I know that the government can do anything it wishes.

    Like most teachers, I objected to the formation of the quango called the General Teaching Council. I refused to pay for it. The government took the money from my wage packet anyway and they continue to do so regularly.
    When I telephoned to complain, I was told that a statutory instrument had been written and I had no choice.

    So, the politicians choose to continue to allow bank bonuses taken from our money! As I say,


    in the coming election.

  • Comment number 30.

    Excellent comment Rugbyprof, I would agree entirely with all you say!

  • Comment number 31.

    "Together mortgages ... were worth 80% or 90% or even 100% of the value of the properties customers wanted to own, topped up with personal loans."

    New legislation is required. Banks should not be allowed to inflate house prices by offering easy mortgages.

    The Supreme Leader has often said: "No return to Boom and Bust!" Unfortunately he needs a new boom before the next election.

  • Comment number 32.

    Will Brown garantee that he will not take any bank releated jobs / directorships next year after he loses the next elecvtion.

    Thought Not!

    I had to laugh this morning when it was anounced on Today that Brown, during his month long holiday, might do a weeks comunity service? What cracked me up was the suggestion that he joined a thearter group, given his nick name on here of Clown!

    Also given his promise to spend every moment of fixing things like MP's expenses, the banks, the ressesion, etc its reasuring to know that he beleives all is well in the UK so he can take a month off.

  • Comment number 33.

    Interesting how the same names keep cropping up in the small, exclusive world of banking and government. They are all no doubt very honorable and well-meaning gentlemen.

    Dereck Wanless for example was a non-exec director of Northern Rock presumably advising on banking and compliance. Prior to that he was Chief Exec of Natwest when it ran into trouble and was sold to RBS. He undertook the review of the NHS at the request of the Tony Blair, thus becoming the 26th banker to be knighted. Funny old world world............

  • Comment number 34.

    Brown deliberately made the regulatory system ineffective just so he could unleash, and bask in the glory of, a debt-fuelled boom.


  • Comment number 35.

    Although not an admirer of RP this time he is being practical and commercial. Northern Rock will come good in time and the Exchequer will in due course have its loans repaid and a profit from the sale of the company. Nothing can happen overnight. As far as bonuses go we want as many commission earning staff to earn the largest bonuses possible because that means the business is thriving. It is managerial bonuses that should be restrained and I am sure that is being done right now. Barclays and HSBC show what can be done even in this environment by a well run bank not dependent on government funding. We want banks to be more and more profitable and out there taking commercial risks by lending to business.

  • Comment number 36.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 37.


    I find that story very interesting.. An offshoot of that situation could be that, instead of NRK selling the property at a fire sale price They could be purposely keeping it on their books and writing a factitious asset price into their books (i.e., by not realising a loss, they instead claim they have an asset at 2007 levels.

    This is dangerous territory for us all..

  • Comment number 38.

    Here we are again, with Robert Peston reporting on Northern Rock. A lot less comments than the halcyon days, but still...

    What is there left to say. The brand is finished, the splitting into Bank & Asset will leave one "good" bank and one "bad", the latter carrying the government loans (or as I prefer to call them, our money and that of our children) and we'll see further job losses in the region becasue of it.

    If the government are so worried they've had to ask RP to deviate from reality and write a party political piece about "inprovements" in NR rather than detailing the shocking >£700m loss, well, then that says it all.

    The banks who resisted Government involvement have made profits at the expense of those who took the citizen's coin. Rightly so.

    Election, privatitization, savage swingeing workforce cuts and equity sales lie in the Rock's future... Terrible shame.

    I hope Adam Applegarth is happy now.

  • Comment number 39.

    Here's some simple maths - it's only meant to be a guide and not scientific.

    Currently the Govt. is arguing the NR share price at point of failure was 5p per share.
    421 million shares = market Cap. 21 million squidules.

    The previous shareholders want 500p per share = market Cap. 2.1 Billion

    In the first quarter of this year NR lost 700 million.

    If the trend of the 1st quarter continues, we can see that NR will loose 2.8 Billion over the course of this year.

    That means in order to 'make a profit' the Government will need to sell it for SIGNIFICANTLY MORE than the disputed 500p per share. However what's the betting they sell for for more than 5p and claim a 'profit'

    Now this does not include the current court case (which the Govt. could loose) - resulting in them having to shell out more than 5p per share.

    It also does not include the assets and cash lying around at NR.

    Nor does it include the difference in interest that NR is paying for the Government loan and the RATE AT WHICH THE GOVERNMENT IS BORROWING THE MONEY FROM THE BANKS VIA GILTS.
    ....a difference which is surely to grow as the rates are forced upwards.

    ....but who in their right minds is going to buy back NR shares at over 500p in the next 15 or 20 years - let alone the Governments hope of 'before the next election'? Remember that NR will not be a growing bank, but one that is (and has) drastically reduced it's market share.

    The fact is we're stuck with Northern Rock for a VERY LONG TIME. There will be no profit and no benefit to the taxpayer.

    I am willing to bet that the Government splits the bank into good and bad, then sells the 'good' at a decent share price - e.g. near 500p per share and the rest will be BRUSHED UNDER THE CARPET. Then they can claim a profit for the tax-payer.

    I bet even organised criminals are baulking at the audacity of this scam.

  • Comment number 40.

    27. At 10:40am on 04 Aug 2009, BankSlickerminustheR wrote:

    "The disclosure means that key Labour donors such as Lakshmi Mittal as well as Tory donor Lord Ashcroft will still be able to pump millions of pounds into the forthcoming election campaign, despite promises to curb the influence of wealthy backers." Observer

    Doesn't this just sum up the 'choice' we have in politics? What choice?

    We have the corruption on the left of you and corruption onthe right of you...

  • Comment number 41.

    John from Hendon
    4 "Should we not take its assets and liabilities into RBS or Lloyds?"

    As a shareholder of Lloyds I would say thanks but no thanks. We have already been stiffed once by the shotgun marriage between Lloyds and HBOS, complements of Sir Victor Blank, Gordon Brown and the institutional shareholders of Lloyds and HBOS who thought they were being clever by voting in both banks thereby ensuring it went through. Due diligence, what due diligence?

    Lloyds was a paragon of Gordon Brown's former mantra of prudence, and would be our best bank profit-wise had it stayed away from HBOS. The shares traded at ten pounds ten years ago - the Government and Sir Victor/Eric Daniels had to give them away recently at 38p. It sums up for me all that has been rotten about New Labour - fixers and twisters, and beneath the spin a bunch of serial incompetents.

    Thanks and no thanks to NR and NL.

  • Comment number 42.

    Performance related pay (bonus culture to the non thinking)is taking a battering from politicians, press and public alike

    Am I alone in welcoming a system where I am paid according to my performance and the performance of the company I work for?

    The banks are a bad example because the objectives on which the bonus's were based were ill thought out and poorly supervised.

    If I have more than a have not because I have worked harder and smarter then I can't see a problem with it, morally or otherwise.

  • Comment number 43.


    Your quote:

    It's now awaiting approval from the European Commission to break itself up - and create a slimmed down bank with fewer of the poor loans in it.


    Interesting that the first real piece of re-organisation of the UK banking structure involves:

    1) A government owned bank
    2) A slimming down of that bank
    3) EU approval

    Northwern Rock is a big story in itself but is it not now showing that the UK government does not have control /a free hand or the reins over the virtual UK banking system.

    This is something that all of the MP's, government, cabinet, regulators, BoE are hiding from public discussion - that the UK 'virtual' national banking system cannot restructure, reform, re-regulate the virtual UK banking system because as EU members and signatories of umpteen different international agreements and handshakes (for favours?).

    The UK banking structure and regulation is crucial to the UK economy but our current and previous governments and regulators have given away sovereign powers to the EU because they could not/cannot themselves control the UK economy and have chosen to hide behind the elitist EU and parliamentary and city regulation bureaucracy.

    The real position is that the UK government's hands are tied and all UK banking city regulation will have to be APPROVED in Brussels/Strasbourg which means that while the UK remain EU members effective radical regulatory reform of the 'virtual' UK banking system is likely to take at least several years (5 years+ ?) under present laws, conditions and circumstances.

    The politicians/government are now conning us worse than ever - they all know about the EU hurdles because the banks have told them this and the greedy bankers are still now sitting there quietly and privately laughing at the populous while they are getting richer and after UK bail out money.

    Sooner or later the discussion will have to consider what is best for Britain as being either a member or non-member of the EU because EU reform for improvement of British interests would take even longer than radical reform of UK banking law & regulation and few politicians (if any) NOW have the ability and guts to take it on.

    So much for MP's now being and becoming reformed characters - nearly all are lying about banking reform in the lead up to the general election.

    It will be interesting to see how many MP's and regulators 'break ranks' over the next few months - to tell the public the truth on these EU related issues. Vince Cable might be the first except that this kind of tranparency may not sit well with Lib Dem policy on Europe - talk and promise a lot but as not expecting to be in government and actually making governmental decisions.

    Remember, that much of the EU structure, laws, procedures, is deliberately put is place so as to be virtually impossible to be over-turned.

    The UK banking crisis may have passed the first hurdle in terms of stability - but there are many more hurdles to follow.

  • Comment number 44.

    IMO Northern Rock will never come good and will be just a millstone round our necks.

    The name and brand is finished,oh how they would now like all the small high street branches back that savers used to put small amounts into .

  • Comment number 45.

    Patience is our missing virtue.

    Any sale of Northern Rock is likely to be delayed by legal actions:
    1. on behalf of shareholders who want something for their bankrupt Bank. They won't get it, but we have to follow due process.
    2. Competition issues are important to the UK, as we don't want other countries that own banks to have competitive advantages either.

    Not all those "bad loans" will turn sour because they're mostly just provisions for what may happen. As markets return to something like normal, many of those provisions will be cancelled.

    Patience is what we chiefly need!

  • Comment number 46.

    35. At 10:59am on 04 Aug 2009, Barnabas wrote:

    "Although not an admirer of RP this time he is being practical and commercial. Northern Rock will come good in time and the Exchequer will in due course have its loans repaid and a profit from the sale of the company."

    Come good in time? What time? your childrens' time or your grandchildrens time?

    I can see no evidence to suggest the Government will make ANY PROFIT from this deal other than 'our Government assures us'

    This would be the same Governemnt that 'assured us' that:

    WMD existsed in Iraq and Iraq was 'linked to terrorism'
    There would be no more boom and bust
    The additional funding to the NHS was having a positive effect (barring MRSA outbreaks and c-diff etc.)
    The recession would be over mid-2009
    House prices were not over-inflated
    MP's weren't abusing expenses
    The troops were well equipped
    ...I could go on all day....

    Government Credibility = 0

  • Comment number 47.

    41. At 11:12am on 04 Aug 2009, majorroadaheadagain wrote:

    "As a shareholder of Lloyds "

    STILL? Haven't you learnt anything yet?


  • Comment number 48.

    Are these additional losses or just the result of over valued loan assets being further written down?

    All banks should be forced to value such "assets" at their actual recoverable value; and if they try the "can;t put a value on them in turbulent times" lie (they can always value them when its good news)consider them of no value (that would incentivise proper valuation).
    Perhaps then we'd have a proper idea of the actual situation, rather than the drip drip drip as banks decide to recognise the cost of their previous actions.

    Of course in the case of Northern Rock, we the taxpayer carry the risk of such losses - perhaps a good reason why the government would prefer to conceal how much it will actually cost us.

    If Northern Rock's new business isn't profitable, what reason is there to keep it running?

    Providing additional lending on an unprofitable basis for political ends would seem to be against the public interest.

  • Comment number 49.

    Our Love (for Northern Rock) has died away
    Cause weve ended now as lovers

  • Comment number 50.

    "at their (and our) peril."

    At their peril? What's so perilous about getting as much as they can, as quickly as they can for themsevles? Nothing perilous about losing a job, even a chielf executive's job, if there are £millions stashed away and still geting £millions in pensions.

    Perils are all ours.

  • Comment number 51.

    45. At 11:19am on 04 Aug 2009, leftilkley wrote:

    "Not all those "bad loans" will turn sour because they're mostly just provisions for what may happen. As markets return to something like normal, many of those provisions will be cancelled."

    I disagree.

    I was a NR mortgage customer right up until it collapsed, I left and moved to another provider - simply because I could (have a good credit rating and equity on my property). who do you think remained?

    The whole point about a market is that people can seek alternatives, but as there is a restriction on the mortgage market - driven by equity and credit rating - then this is not open for free movement.

    Only those likely to default remain - I suspect the numbers are being massaged in the opposite direction to show that things are not as bad as they seem.

    Remember, NR sold most of it's mortgages in the North and North East due to local loyalty.
    ....and where is employment being hit hardest?

    2+2 = 4 and just because the Government assure is it doesn't - will not change the fact.

  • Comment number 52.

    it's also a good day to bury bad news, but not getting away with it that easily....

    The week of banking results may turn the markets into negativity for a very long period of time...

  • Comment number 53.

    #37 JavaMan1984 wrote:

    'This is dangerous territory for us all..'


    This is probably a deliberate Gov't attempt to prop up their 'Bubble Economy' until the next GE.

    How cynical is that?

  • Comment number 54.

    'Vote outside the Box' - 'Revolution' - 'The Have and Have not Society'. These all say that those in power have no idea what to do. And they are probably as much out of their depths as the rest of us.

    Two of the four reasons Gibbon gave for the Decline and Fall of the Roman Empire were the complexity of administration and the easy life of the Romans. (The other two were the size of the Empire and the wish of those outside the Empire to share in the Good life - and we certainly have those today.)

    Trouble is more regulation means an even greater complexity of administration than we have already, leading to greater costs, a further downward spiral of activity, more unemployment, less revenue from taxation, less benefits where benefits are needed, idle hands and idle minds, and a collapse of civilisation.

    What is abundantly clear is that those in authority have already lost any claim to the moral high ground and any claim to the respect of the nation, which are both needed if the Rule of Law is to be maintained in any form. It is probably far too late to argue for self-discipline, which is the only way in which society can run without volumes of quangos, regulators, more costly bureaucracy etc, except that the reaction of the City to Bonuses and MPs to expenses makes it clear that self-discipline is not yet on the agenda.

    What we are in the middle of is a collapse of civilised behaviour, with too many people who should know better behaving like spoilt brats. As Mothers everywhere used to say "It will all end in tears". And it will.

    Whatever it is we face, whether hyped-up unions or straightforward social anarchy as opposed to the commercial anarchy we have put up with for years already, it will be very painful. We'd better get used to the prospect.

  • Comment number 55.

    Mr Peston do you really think this recession was CAUSED by a banking crisis ?

  • Comment number 56.

    48. At 11:29am on 04 Aug 2009, Reaper_of_Souls wrote:

    "Perhaps then we'd have a proper idea of the actual situation, rather than the drip drip drip as banks decide to recognise the cost of their previous actions."

    Reaper - you make a good point here, and I hope I can answer it.

    I have a good friend who used to work in (one of the) biggest investment banks in the world - in the credit derivatives department.

    The setup and management of these instruments were so complicated that even though he was right at the coal face - he said it would take years to work out what the total exposure actually was. On a portfolio basis is was reasonably accurate - but from a company level it was an incomplete picture.
    I have worked in several Asset management firms and not one is able to achieve an accurate picture of thier 'funds under management'. The inability to get this simple picture clear leaves them with no hope of achieving their overall exposure as a company.
    I have sat in meetings where fund managers argue with the data teams about what their holdings actually are compared to what they are being shown as. I've sat through audits which were a complete joke (and it's frustrating not being able to name the culprits) - where an auditor is railroaded into coming to the 'right' conclusion.

    Most asset management is done on a 'whats on the screen' basis - and as we all know the data on the screen is only as good as the person inputting it and then only as good as the person interpreting it. Very few fund managers keep a seperate record of their holdings, and where they do they are often the old school experienced managers.

    I believe this is the reason for drip drip information - simply because they are finding out as fast as we are.
    This is of course added to by the tendency of Government to release the bad news slowly.

    Needless to say the chap I mentioned earlier resigned from the position about 2 years before the collapse and has just completed his masters degree - which sort of validates that he's no idiot.

  • Comment number 57.

    Perhaps the Rock's problems are caused by their short termist approach which reduces the number of good loans on their books. I had a fixed rate Northern Rock mortgage but was effectively forced elsewhere - because when the fixed rate term expired, they only offered a mortage on their standard variable rate. And because I'm not likely to default, I was able to get a better deal with another provider. OK, so Northern Rock got back the £100k+ from me, but they lost someone who was a good mortage bet and would have provided them with regular reliable income. The same must be true for anyone in the same situation who could get a mortage somewhere else - the only people who would have stayed with them would be the higher risk borrowers who couldn't. And they are now more likely to be defaulting.

  • Comment number 58.

    #40 mene mene tekel...

    "We have the corruption on the left of you and corruption onthe right of you..."

    I agree, but I regret to say, that I would use a stronger term (moderation permitting). The privatisations of the eighties resulted in grateful political donations and directorships for those involved.

    This political "innovation" showed the way: ever since, governing politicians have pro$tituted themselves and pimped the rest of us without our consent.

  • Comment number 59.

    47 Writingsonthewall

    What shirt?

    I think the key to any salvation for Lloyds (and the current price rise from 30p to 85p suggests that there is some chance of salvation, and even better), will lie in the new Board. Ie when Blank and Daniels and all the non-exec turkeys who did vote for Christmas are gone.

    They can start unwinding the assets (assuming the government continues to insure the worst levels of toxic assets from HBOS as apparently agreed. If the new Government and/or the Europeans go for a quick breakup then it will be a fire-sale. However, as we (the taxpayer) own 43% it is in all our interest that they dont do that. Tomorrows results might give a further indication as to whether there is going to be a chance of a long term revival, and the chanbce for the Government (ie us) to make a proit, unlike it will do from its Northern Rock disaster.

    Lloyds, Bank of Scotland, Halifax, Birmingham Midshires, Cheltenham and Gloucester, Scottish Widows etc etc might make an attractive portfolio if and when the debts are unwound. Perhaps then I can start going out again with more than just my underpants.

  • Comment number 60.

    57 makes a valid point, the government's idea of 'running down the book' ultimately led to a rise in defaults as the actual quality of the loan book has been affected adversely. Something that I pointed out would happen immediately after the bungled nationalisation.

    The bad news here for the taxpayer is that this is a double whammy, some folk on here going on about the compensation court action have not factored all government meddling in. When this goes to the European court of human rights (and it will), the taxpayers may have to bend over even further!

  • Comment number 61.


    I hope you are right and people will 'VOTE OUTSIDE THE BOX'.

    I dont see it though, alot of people have been trying for a while to raise awareness but the only place you can get airtime is on blogs of this kind, which most people do not read and never will.

    Main stream media coverage is based on incumbent popularity and what ever political leverage the particular newspaper or TV station works under, not the inherent value of a particular argument, no matter how obvious it is.

    You simply do not get proper debate, when a journalist asks the banks to answer tricky questions they simply dont bother turning up as was the case recently on newsnight.

    Try to undertake positive action to get noticed and all of a sudden you find out the police have already infiltrated your organisation to gain intelligence to 'stop a crime being committed'.

    I can only conclude that you will only get a lot of ticks outside the boxes when so many people are suffereing that they can not keep the lid on the truth anymore. It is unlikely to be pretty.

    It is most likely to be sometime in 2011 I would say, unemployment will be very high and social support and healthcare diminished as the government will be forced to turn the taps off or face insolvency.

    Some of us at and many others keep trying but meet with a wall of incumbent self interested financial,legal, energy and media power which permeates all levels of society. It is not a conspiracy as such just the darker side of human nature has got the upper hand collectively at the moment and is now well dug in with multiple lines of defense in place.

    Like I said, with deep regret, because of that it wont be a tick outside the box that shifts them it is likely to be something else wholely less pleasant or civilised.

    I wish I could see something out there that would lead me to an alternative conclusion, but we are so effectively repressed at the moment we dont even know we are repressed. Apathy and newly unjustified trust in systems our ancestors spilt blood to build prevails, systems that were the envy of the world, but those systems have become corrupted by the spiv, lawyer, banker, spindoctor, quango and political class, the class that wants all of the rewards but are not prepared to contribute anything of real value to society, cynically gaining that wealth by pretending to represent the interests of those who provide the real value i.e. the much quoted but never supported and thouroughly soaked ' hard working families and small business without whom everything would collapse'. They are creaking under the weight of shysters and hangers on now god bless em and nobody truely, genuinly represents thier interests, they have no voice.

  • Comment number 62.

    None of the current woes of Northern Rock would have been as severe if the Government had implemented either the original request of Lloyds TSB to buy the bank, or had implemented the cuyrrent banking support structure. By simple nationalising the bank, and removing shareholder rights, the Government side-stepped the lack of supervision displayed by the Bank of England and the FSA.

  • Comment number 63.

    Many people on here are complaining about politicians and saying they wont vote, then complaining about the lack of action or solutions from politicians, some in the same comment which is curious.

    Through getting involved or setting up new political parties people can influence or change things. People will happily give up an evening ranting on these sites or complaining in the pub to others getting quite vitriolic and impassioned about it but they wont give up an evening to a party or join a lobby group or actually do something about it.

    The cast majotity of politicians are in it to serve and make a difference locally or nationally and as the saying goes dont ask what can your country do for you but what can you do for your country.

  • Comment number 64.

    If businesses are suffering now because of an increase in the banks lending spreads they'll be in big trouble in a few months if gilt yields are anything to go by.

  • Comment number 65.

    Rock: Crumbling less

    Goes along with

    Recession: Not as deep as the Ocean


    Government: Not as incompetent as Laurel and Hardy


    Parliment: Not as untruthful as Pinocchio


    Unemployment: Not as high as Everest

    How that for optimism?

  • Comment number 66.

    62 Whizbang2005

    If Lloyds had been allowed to buy Northern Rock then perhaps it might have deflected them from buying HBOS.

    Either way, little has been said about the blatant way in which the Government, and by default the EU, allowed a relatively large and secure bank like Lloyds TSB to buy an equal-sized bank HBOS and end up with over 30% of the country's savings and loans.

    The fact is that the Prime Minister himself must have waived through this deal, or at least put pressure on the competition authorities to do or say nothing. That changes the competition rules forever, if you can argue that size is secondary to the National interest when it comes to saving a dud but not when you are viewing two sound companies. It also shows that they must have known that without the deal HBOS was dead, therefore the whole thing was put together with no regard for Lloyds shareholders but to save the Government's face from another bank collapse.

    There was a time last Winter when there was some pressure from Scottish grandees to try to scupper the deal and to mount a counter bid. They must be thanking their lucky stars now. All talk about the national (Scottish) dimension of the demise of Royal Bank of Scotland and Bank of Scotland and all the Scottish insurance companies linked with both companies, has gone on to the back burner, but it is hard to envisage much of a future for Scottish banking once all the dust has settled.

  • Comment number 67.

    Have I not grasped the NR thing.... I thought they were wrapping up their mortgages and selling them off as CDO's etc..... effectively releasing them from the debt liability!

    If so, is the current problem a result of the stuff they were left holding when it all it the fan..... if it is then where are the rest of the mortgages they sold on?

    Who's holding the baby?

  • Comment number 68.

  • Comment number 69.

    News:Thanks to Mrs.Carr,Mo-he-ebb.6/1 + 7/1.((Know your place of water... (cont.)))

    Business:I know one CA student(not me) who thinks NR (Northern Rock,not Nick Robinson)is making a profit.

  • Comment number 70.

    - the banks are starting to make money again but thay are just as ruthless and inflexible as before .i was made redundant in June because of the recession, i contacted my bank last week to tell them i couldn't pay all my direct debits this month but if thay didn't add charges i could make the payments next week ,no chance 5 x £35 + unplanned borrowing £25 .£200 extra iv now got to fined same old story banks are out to make money no mater what misery and mayhem that cause along the way

  • Comment number 71.

    Another groundbreaking banking story from Comrade Peston at the Banking Broadcasting Commission, Republicj of Wasteminster.


  • Comment number 72.

    Afternoon Pestonites

    The shipping lanes remain quiet out here, suggesting to me that the economic downturn has some way to go yet.......

    On the general behaviour of banks and bankers, I was most impressed by the piratical comments of John Varley, chief executive of Barclays, who turned to footballers to explain bankers' pay. Varley said: "The football analogy certainly goes some way I think (to explain bonuses) ... There is simply no higher priority that to ensure we field the very best people. That in a sense is exactly the same as a football manager if they are going to win."

    He didn't mean to do it, but he hit the nail on the head, in saying that it is all about winning. Each bank sees everyone else as the opposition and is determined to defeat them: the opposition includes not just other banks but the govt of the day, national interests, account holders, SME owners, mortgage holders etc. The banks have a lot of power and they will use it to fill their coffers and empty ours.

    This is also my business strategy, more or less.

    So today's tricorn hat award for piracy goes to Mr Varley. Keep up the good work me matey.

    PS: But wouldn't a tick outside the box be a spoiled ballot? or a hanging chad? as a Somali pirate I am quite in favour of a Chad hanging, as never really liked 'em

  • Comment number 73.

    I've figured out how the banks will recoup the splash cash they lost at the casino. We of course will stump up in the form of higher charges, and (eventually)higher interest rates. How? I run a small business and have been informed by my bank, RBOS, that the cost of renewing my overdraft facility (despite not actually using an o/d last year lucky me) is to increse by 50% !!! No doubt all RBOS managers (?) will no be issued with masks and pistols

  • Comment number 74.

    If the government can't run a health service how did we expect them to run a banking system?

    This is the road to serfdom.

  • Comment number 75.

    'Bubble maker aims for giant record'

    The guy in this story clearly hasn't heard of a certain James Gordon Brown...who only took 10 years to inflate his giant bubble!

    Brown still holds the record I'd say.

  • Comment number 76.

    #24 StrongholdBarricades asks "Why was it too big to fail?"

    Possibly because it is in the North East of England - a traditional Labour supporters' area?????

    Southern Rock would probably been allowed to fail....

    Cynic, moi?

  • Comment number 77.

    akaFlyingAspidistra wrote:
    There are, if you look hard enough for them, small, local building societies (I have one in Kent) that didn't lend recklessly in the 'good' times and as a result are coping with the banking crisis better than the Casino banks.

    Really? So what profit did they post for the first half? How much in tax have they poured into the Treasury? How much value have they added to pension funds?

    NR serves only to remind us that banks and building soacities with a narrow range of products are easily brought to their knees. Barclays serves to remind us that global banks with an huge product base are the survivors.

    The debate about banks is narrow in its focus and worse showa a complete lack of knowledge about banking by the public at large and the BBC in particular

  • Comment number 78.

    Robert, you say 'Last year the Rock put acute financial pressure on better quality borrowers to transfer their mortgages to other banks. And the Rock was left with those borrowers whom other banks didn't want.'

    I fail to understand the business logic of sending away the good customers and keeping the bad ones, NR will just end up a sub-prime bank, worthless assets and huge debts whilst the other banks (non-public owned ones) have picked over the cream of the customer base and profitted from the fees charged for changing mortgage providers.

    They should foreclose on all the bad loans, writing off the houseowners negative equity. The properties should then be handed over to a housing association and the current owners can become tenants.

    NR ends up with only good customers and a viable loan book making the whole thing saleable.

  • Comment number 79.

    65, Bravo!

  • Comment number 80.

    Warren Buffet described derivitives as weapons of mass destruction and Barclays have positions of £500 billion in them which on top of credit card and lending defaults makes them by comparison a massive explosion waiting to happen.
    To suggest on TV that they have not had any government help is an untruth given they have passed over buckets of their toxic rubbish to the treasury and have had government help all through. Plus and most importantly they have been officially sanctioned to keep on their books yet more rubbish not at market value but at whatever Barclays feels they are worth even though they would only achieve 30% of face value at best.
    Any move in the market in a southerly direction would make Barclays explode faster than the worst nuclear holocaust.
    This bank is no national champion but an accident waiting to happen that will make Northern Rock look like a joyous celebration of financial prudence.
    Barclays PR hs been very slick but incredibly economic with the truth and we should steer clear since you can't keep spinning for ever, as all too many governments have found to their cost.
    Come on Robert star reporting some facts again, no one can ever deny those.

  • Comment number 81.

    Read some of the renewable/clean energy information websites and newsletters and you'll soon see how badly the UK financial institutions are letting the country down.

    According to Ernst & Young US venture capital investment in cleantech companies in Q2 2009 reached $572m, an increase of 73 per cent in terms of capital, with 48 financing rounds, a 100 per cent increase in number of transactions compared to Q1 2009.

    In the UK ........well nothing much happened because there isn't really much of a VC industry left.

  • Comment number 82.

    As I have said before on this site, there is collusion, between banks, courts, Legal profesionals, and to some extent Government.
    The Government may express disaproval of bank activities, but will turn a "blind eye" if it suits them!
    The banking code of practice is ignored, and there is no effective body to curtail or inforce these rules.
    Banks do whatever they like only concerned with their own interests.
    Whatever party gets in or stays in, Nothing will ever change as long as the people of this country continue to tolerate the likes of Permanant under secretaries etc. (The Mandrins Of whitehall).

    If we, the people of this country do not ensure that the banks are "sorted out" NOW!, then all we do is make a rod for our own backs in the future! (and dont forget the MP expenses scandal)
    Believe this: COLLUSION!

  • Comment number 83.

    Here are some more maths from the forgotten world of 'logic'

    Currently Lloyds share price lies at 83p. The stake the Government took was at 171p.

    That means (once again ignoring the interest paid on the loan by and to the Government) that in order to 'make a profit' the share price needs to rise about 51%

    In the period 2005 - 2007 (the boom years) the share price only increased by 33% (from 400p to 600p).

    2 years in a boom for just over half the percentage rise required.

    Doesn't hold much hope for a 'quick buck for the taxpayer' does it?

    Of course once the Government starts selling their stakes it will cause the market to depress as it floods it with 13 billion shares. This means it can only be done with a slow release over a long period of time.
    Added to this the Government will be shedding other bank shares at the time then they need to be careful not to bring down the entire sector.

    As the Government will learn, investing in shares is a long term strategy and should not be done with money you cannot afford to loose.......whoops.

  • Comment number 84.

    professor_driftwood wrote:
    "Together mortgages ... were worth 80% or 90% or even 100% of the value of the properties customers wanted to own, topped up with personal loans."

    New legislation is required. Banks should not be allowed to inflate house prices by offering easy mortgages.
    Surely it was the greed od house sellers that inflated house prices - not the Banks. Perhaps we should return to the good old days when only the rich and middle classes woere offered mortgages - better still lets only allow the less well off to pay for small items "on tick". No lets get into the 21st century

  • Comment number 85.

    74. At 2:44pm on 04 Aug 2009, truths33k3r wrote:

    "This is the road to serfdom."

    Ah but luckily you got your teeth done yesterday and will be OK. I on the other hand will be forced to return to pliers and the 'local dentist' - who is also the blacksmith.

    Luckily I have turnips with which to trade - you can't got short on a Turnip

  • Comment number 86.

    76. At 2:48pm on 04 Aug 2009, yam750 wrote:

    #24 StrongholdBarricades asks "Why was it too big to fail?"

    Possibly because it is in the North East of England - a traditional Labour supporters' area?????

    Same old argument - it's got very little to do with politics and more to do with the consequences of letting ANY bank fail. If this had been the case the rush for people withdrawing money would have been immense.

    Can anyone here who had over £25k in the bank at the time honestly say they would have left it there after Northern Rock went to the wall and everyone lost their money?

    I await the silence.....

    It's too easy to make political gain out of it - but really if you want political gain you don't have to look very hard - making up stuff isn't neccessary.

    As Lloyds is a (and always has been) London based bank - what political gain was there in saving it?

    You cannot answer because there wasn't one.

    The ONLY gain from stopping any bank collapsing was the gain that Barclays, HSBC and others made from not being pulled down with the failed banks. That gain was seen yesterday - in the form of huge profits.

    We get enough spin from our Government - we don't need it here too thanks.

  • Comment number 87.


    "Barclays serves to remind us that global banks with an huge product base are the survivors."

    When you say 'Global banks' does this mean 'prepared to invest in any market no matter what the moral standpoint is' - to the rest of us?

    The Global base was expanded into the South African market during Aparthied - where other banks declined to do so - in order to prop up the regime.

    Is that what you mean by survivors? Prepared to tread on those less fortunate in order to better themselves?

    That aside, you cannot convince us that Barclays is in someway excluded from this downturn. They (along with HSBC) have merely benefitted from the rapid demise of their opponents.

    Lets also not forget that they dilluted their shareholders by accepting middle east money in order to 'survive'.

    We'll see how this one turns out before we start lavishing praise everywhere.

    Most of Barclays profits are coming from the returns on the MONEY they LENT to the GOVERNMENT to BAIL OUT other BANKS.

    Don't you get it yet?

    Did you buy into that pyramid scheme a few years ago by any chance?

  • Comment number 88.

    Old saying: Arrogance and stupidity go hand in hand!

    hmmmm I wonder, is that a national trait?
    or the select few who preach?

    Perhaps Its a question of another saying:

    All talk and no action!

  • Comment number 89.

    "British Banking," now there's a thought.

    Anyway as you say, "Northern Rock's losses are a reminder that bankers depart from the boring rules of sensible old-fashioned prudent banking at their (and our) peril."

    I am far from convinced that Bankers, even today in the aftermath of the financial meltdown, understand this.

    Northern Rock's former bosses were consumed with greed. Large profits probably looked clever first and useful second. When the profits didn't materialise inevitably they ended up looking pretty daft (at best,)with a useless bank on their hands and taxpayers propping up the rich with bailouts.

    Really annoyingly the rich are still in control of these institutions and without even needing to bully the poor, because ordinary folk are not that keen to rebel (apparently) the rich, encouraged by government no less, are being told to increase the lending and get the money sloshing round the economy again!

    This government wants this because it has decided you will vote for someone else if we remain economically marooned. Laughably, given local election results, the electorate look like they think the answer is Tory, (i.e the party of the Rich!)

    It's baffling enough to make me want to lose the will to live.

    Others posting here have remarked about the insidiousness of Capitalism. For it to work there clearly needs to be a strong feeling of powerlessness amongst the people. I would argue this is what is happening because fewer and fewer people seem to exercise the power they actually have, presumably because they percieve that power is being drained away from them?

  • Comment number 90.

    Nobel Laureate Prof Joseph Stiglitz wants Fed Chairman Bernanke to be replaced by someone who is willing to rein in the US Banks.

    Where are the distinguished economists here in the UK willing to call for change after the recent financial meltdown? There is a strange silence amongst UK economists, most of the critical voices seem to be bloggers and journalists.

    You can listen and read about today's comments of Prof Stiglitz here:

  • Comment number 91.

    #90 invisiblehandadvisor

    The article you provided the link to mentions the three people currently in charge of the US financial system - Ben Bernanke, Tim Geithner and Larry Summers. The article goes on to state that 'those three championed the deregulatory and easy money policies that helped cause the crisis.'

    What do you think the three have in common?

  • Comment number 92.

    "It's baffling enough to make me want to lose the will to live"

    Join the club mate! seems like a very good option ATM!

  • Comment number 93.

    Didnt Virgin try to buy NR but the government said the offer was too low! pity they didnt let them have it, it would have saved the taxpayer a fortune and would have wiped the smile off branson's face..

  • Comment number 94.

    #87. writingsonthewall wrote


    Don't you get it yet?"

    I don't suppose it has occurred to you for a single moment that perhaps DecentJohn is the one who "gets it", and that it is you who is mistaken?

    No, I thought not.

  • Comment number 95.

    During and after the Second World War many many families lived week by week and in Council Houses. The weekly paypacket was understood by both wives and husbands

    Today, we have individuals with many credit cards, mortgages and no financial training, qualifications or real money skills or savings. Yet they lead complex finanicial lives, right on the edge..

    Until we return to a Money Society in balance with our Social skills and understandings that debt is BAD, not a GOOD thing, we are not going to progress.

  • Comment number 96.

    They don't mind
    When you fall behind
    Your bills on time
    But I Am Not Afraid
    If they come let them come

  • Comment number 97.

    #84. Decentjohn wrote:

    "Surely it was the greed of house sellers that inflated house prices - not the Banks."

    Quite right - Agreed. If the banks had not overvalued the houses (etc.) then the house sellers could not have sold at the inflated prices no matter how greedy, or not, they were.

  • Comment number 98.

    Well Robert nothing much new to tell us in this article; but why let marginally better news get in the way of more negative comment, eh matey?!
    After all, the Rock would probably have dragged down the whole of British Banking if it had been allowed to fail, and has had to clear out all its well-performing borrowers, so what else would you expect by way of performance this year, and probably next, given the dross it's left with?

  • Comment number 99.

    Your report about the losses at Northern Rock did not mention, what I am sure I read the in the Times, that they had paid back much of what they had borrowed from the Government and were in fact well ahead of schedule.

  • Comment number 100.

    #95. JohnnyZero66 wrote:

    "Until we return to a Money Society in balance with our Social skills and understandings that debt is BAD, not a GOOD thing, we are not going to progress."

    OK, so how do we get from where we are today to this state? (Without massive economic disruption, or is the massive economic disruption an essential element in realigning the economy?)


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