91�ȱ�

The directors and executives at Northern Rock should be ashamed of themselves for trying to pin your blog as a source of the problems at the bank, although if it such a claim is in anyway upheld it will do you and the power of blogging no journalistic harm. The executives at NR fell into the classic trap of borrowing short-term to fund long-term assets. It is in finance terms a schoolboy error. Anyone who blames you for stating your opinion is foolish, investors may recieve a full guarantee of the deposits they have there, above and beyond the existing deposit protection act, but what they fail to understand is that the process of winding up such a large institution will see their access to these funds delayed for some time. Ask the creditors at BCCI how few pence on the pound they recieved 10 years after the accountants and lawyers had feasted at the corpse. A different situation of course, but I doubt that the autopsy of NR would be as quick as people seem to think.

Preston, the reason you have been criticised so much by you readers is not because of the information you presented in relation to this story, but the way you presented them. You sensationalised the situation. Surely your a big enough man to admit that ?

Whether or not you- and other broadcasts- made the situation worse isn't the point for me; the issue I have is whether what you reported was factually correct.
"..on August 16, in my blog, I wrote that Northern Rock was “the stock to watch” because it was “heavily dependent on funding from the bond market.."
However, it was because short-term funding dried up that the Rock ran into a liquidity crisis, not a fall-out in the bond market. I am afraid that this suggests you either misunderstood the issues or deliberately ignored the consequences of mis-reporting. You go to say "..
it had failed to ensure that its sources of funding would continue in all market conditions.." No regulators anywhere ever measure this proposition - taken to its extreme , it means there is no money (or value) anywhere for anything so protection would be impossible. How would they have been able to ensure liquidity without going to the central Bank?

Having watched the tv broadcasts at the time i did think that not enough was said about the deposit protection scheme and the like. That said working for another bank as I do (and with some knowledge of the business models, etc.) we were talking internally in August about how much bother NR woudl be in if the credit crunch bit for any length of time so it is very surprising to hear that they did nothing til early September. The other thing today that must be challenged is the senior exec from NR who said they did not test for a liquidity dry up as it was unprecedented - try the 1973 secondary banking crisis - required learning for people like me who did our banking exams in the early/ mid 80's and a basic, known, scenario to stress against! The otehr question they need to be asked about is their arrears capitalisation policy which is, anecdotally, felt to be more aggressive than others in the marketplace and explains the seeming disconnect between their trumpeted low arrears and no-one wnating to fund them! NR tried to be clever and break the classic "rules" of banking and like many senior bank people they did not understand how their bank makes money, only that it did, and got burnt when a far from unprecedented market scenario occurred.

Robert is to be commended in responding to Applegarths disgraceful slur that freedom of expression is a substantial cause of the current mess. Does he really believe that the collapse of the Rock is a systemic failure and that the causal events were not predictable by even the most rudimentary stress test system. Come off it - the entire board should have been sacked for neglect of duty and gross incompetence - unlike Robert who did and continues to do a fine job in keeping the public informed.

Regarding comment 2 :

1. His name is "Peston".

2. You should learn to use the apostrophe correctly if your (sic) going to share you're (sic) thoughts with the rest of us.

3. That is all.

Warm regards !

Erza

Post number 2 by "Prestons Daddy" is entirely spot on. It was the way yourself and the 91�ȱ� covered the story which greatly increased the problem, brandishing headlines like "what if the Rock goes bust?", when you knew full well, as you have stated in your blog, that NR was solvent and not in danger of going bust. Add that to the scenes of "Panic" and "choas" shown by the 91�ȱ� and it is clear to see how your actions engineered the run on NR.

The fact that you're having to defend yourself in an arrogant fashion suggests a nerve has been touched Mr Peston.

Be a man and take some responsibility. You can bury it with the series of other mistakes the 91�ȱ� has made recently.

Applegarth is trying to wriggle out of the mess he and his fellow directors have created by blaming others, and the first in-line for blame is the media. I would feel privileged if I were you.

Just think of all of those bloggers out there that have been predicting over the past year that a UK lender would collapse as a result of the bursting of the credit bubble. Derided as nutters and ignored.

The web has been buzzing with predictions of this sort both for the UK and the US over the past year or so, yet we are supposed to believe this was "not foreseeable"?

Only to those blinded by greed, it seems.

If any one wondered why Northern Rock got into troule they need only watch excerpts from today's evidence. The management were arrogant and thought they knew better than any one else and markets would not change. By not "stress testing" the bank's liquidity robustly they fell into the same trap as many, often smaller, banks in the early 1990s, when the wholesale markets would not lend to them. Unsurprisingly, few of those banks remain independent or even exist today and the same should happen to Northern Rock.

Except for the size of its mortgage book, which had grown too quickly, the bank is by no stretch of the imagination systemically important. This was not a crisis of confidence in the banking system (money flowed from Northern Rock to many other banks) but in one bank and no one should be surprised having seen the management in action. As for the FSA, what were they doing to rein in this cavalier lot?

There is a certain tendancy in the markets for the victors to rewrite history: this is just one more example of it, or at least Applegarth likes to think it ought to be on the basis of having his backside protected by the Old Lady.
However, it ducks the question of whether banks, having exposed themselves way beyond their own capital base, should expect their depositors to accept these risks when they're not being rewarded for it. It's one thing to deposit at a low rate of interest because it's at a low risk, totally another to face the kind of unscrupulous rip-off Natwest so kindly advertise. And that's exactly what Applegarth was up to, it's disingenuous to say, in effect, that because the risks were incalculable they were non existent.
The exact opposite should have been the case: when in a hole, stop digging should have been the Golden Rule. The inevitable result of behaving otherwise was amply demonstrated by Nick Leeson, and the only difference between Barings and Northern Rock is that Barings was not likely to cause a domino knock-on effect.
And it's here where we meet the true responsibility: the Regulators refusal to do their job, preferring to turn the blind eye to their erstwhile colleagues in the hope that the risks would bring rewards. When you're dealing with some of the international poker players in the kind of unregulated international market that exists at the moment, whether American, Russian or Chinese, letting it be known that it's a no-limits game to the scamsters whilst pretending to the shills that they'e protected is the height of irresponsibility.

It is the penultimate refuge of the rogue to shoot the messenger.

Having failed to risk assess his own business properly Applegarth has the brass-neck to blame the media for its consequential failure.

We are always being told that business executives are highly paid for their competence and judgement.

`Not me, guv' is what I expect from the failed criminal seeking to lay-off his liability on the fact that his parents didn't love him.

Tranquilo Robert. Your articles are excellent, both informative and well written, but the day you bring about the demise of a financially sound institution will be the day you sould consider a career move.

Again I point out that having your deposits guaranteed by the BOE and the blundering Mr.Darling, isn't the same as having the cash. NR would take an age to wind up, possibly too long for many of its customers and do you think further claims based on missed oportunities such as the elderly couple who had placed a deposit on a house abroad and had to settle within a time period or businesses that folded would be take precedent over other creditors. If you do you are foolish. The sensible thing to do in the case of NR is to withdraw your funds if you are going to need them in the near future.

Sir,
Your reports about the Northern Rock affair have been full of emotive sensationalist language designed to instill fear into people.

Phrases such as 'lender of last resort' , 'emergency loan', 'beleaguered bank' (and I could go on) have not helped the situation. The 91�ȱ� still continue to show people queueing outside one or two flagship Northern Rock branches.

People trust the 91�ȱ� and when the read the half truths that you publish they draw their own and often incorrect conclusions. I for one since this 'affair' as opposed to 'crisis' will never trust the 91�ȱ� again. You are a biased and sensationalist organistion on a par with the gutter press but in disguise as a professional outfit.

You have done needless and immense damage to a worthwhile British Company, and yes you are definitely partly responsible for causing the run on the bank. Shame on you, I truly hope that one day the 91�ȱ� and you in particular are victims of some scandal or other so you can reflect your future.

Robert Peston to blaim!!!

Snigger-snigger-snigger!!!

Your blog is both informative and public-spirited. You are a fine reporter who understands finance.

We the British public have need of more reporters and commentators of your ilk.

The truth IS that sub-prime lending IS also a growing problem here in the UK.

Your role did not cause NR's problem you merely pointed out that the emperor was in fact naked.

When are you and your insider going to be up against the treasury select committee Peston? Perhaps Northern Rock's model is flawed and its brand has been irreversably damaged, but you and your irresponsible journalism have been at the centre of its demise! Perhaps you can go and work for GMTV, they are probably more on your sensationalist wavelength!

Robert,

Please don't pretend you did what you did in the 'public interest' as that is quite ridiculous. The glee with which you and others at the 91�ȱ� reported the story was disgraceful.
By constantly linking the 'loan' issue to the guarantees about depositor's funds, you and others created the impression the bank was insolvent and you can't expect us to believe you did not appreciate that. Those pictures of old folks queuing outside in the cold must have delighted you though as that extended your time in the spotlight as 'the man that broke the story' didn't it?

One thing I find particularly distasteful about this whole affair is the way that the 'establishment' appears to be besides itself with joy to be putting this 'Northern upstart' in it's place. Why do we keep hearing that NR is a 'Newcastle based' bank- would we be constantly reminded if it were a 'London-based' bank in difficulties? No, guess not.

It is certainly worth you noting many of your readers comments on the sensationalism of your headlines for Northern Rock. While I am sure this story (and your headlines) have done wonders to highlight your profile at the 91�ȱ�, I do not think it is in the public's interest for you to be creating panic in the streets. Would it be possible for you to accurately inform without using alarmist comments? If not, then I would suggest you join a less reputable news broadcasting corporation.

Whilst it is ludicrous to try and pin the blame for the whole debacle on the 91�ȱ� and Mr Peston in particular, the B91�ȱ� have to accept some responsibility for the way in which they reported the incident. For example; the 91�ȱ� ran stories all weekend along the lines of "If Northern Rock went bust" and every news bulletin featured queues of paniced investors drawing their savings. Yet it took them until Monday to actually report what measures were already in place to protect investor's balances. If this is balanced reporting, I'm a banana.

This blog's desperate attempt to absolve his employers of any responsibility just smacks of self-justification.

Really quite laughable that NR's execs are trying to pin the blame on anybody but themselves.

They fail to admit it was a flawed business model, when events have shown that it was, purely because it was not foreseeable.

If only running businesses was based on foreseeable threats it would be so much easier.........

Mr Peston it seems to me that you have successfully single handedly brought a very good bank, with all be it temporary problems obtaining credit, to a ruin.

I beleive that one day we realise why you really did it. I think we do not have all facts to hand.

In the meanwhile I wish you the same outcome that you have left Nothern Rock.

Kindest regards,

The run is still going on. I don't know why the 91�ȱ� uses the past tense for the run.

You only have to look at the growth in borrowing of NR from the BoE to see just how much has left the bank.

13 billion and rising.

I am not a financial expert but the fact that Northern Rock sought emergency funding from the Bank of England surely is a reflection on NR's senior management. To deflect attention from this main issue and fire a broadside at an economics commentator doing his duty again reflects on those who find the truth too hard to confront.

Robert, I have to say the fact that you have had to come out and defend yourself shows that you are at least partially responsible for the run on Northern Rock.

Now the blame does not rest with you, ultimately it is Adam & the board who did not properly stress test their full business model. As mentioned above this is basically a school boy error and unforgivable on their part.

However what that does not excuse is the way the media, and yourself in particular, gloryified in the down fall of the Rock. Every few hours there were new reports on what would happen if the Northern Rock went bust, and comparisons to several other banks that have gone under, Barings in particular. What was hardly reported on is the fact that Northern Rock is highely profitable, exteremely solvent (as you yourself have mentioned) and only has a short term liquidity problem.

Sensationalist stories that editors such as yourself wrote did exacerbate the situation 10 fold, I myself spoke to several people who said "I've seen on the 91�ȱ� website that Northern Rock is going under so I want to get my money out now". No-one I spoke to had been made aware of the Financial Services Compensation Scheme, or the fact that is was highly, highly unlikely it would even be needed.

You've also made no secret of your distaste for Northern Rock in the past, perhaps this is why you were so happy to see this happen. However as a "Business Editor" you were fully aware of your actions in writing your blogs, including your highly stupid "We should get some money as we saved Northern Rock", which I have to say I was gobsmacked to read.

As well as your good self gleefully pouring fire onto the escalating crisis, you have people like Johnathan S, above, saying such rubbish as "As for the FSA, what were they doing to rein in this cavalier lot?" Cavalier? Cavalier? Do you have any idea how the banking system works, or the fact that Northern Rock has less than half the industry average arrears, and this includes it's so called "controversial" Together product, which has helped countless people getting onto the property ladder in a time when house prices greatly outstrip wages. I don't seem to see anything from anyone regarding BM Solutions etc, who all offer exactly the same type of product as Together, and only jumped on the bandwagon once Northern Rock had proved these products work.

Basically Robert you have to hold your hands up and admit that you screwed up. From the reports I witnessed you were not impartial and did not report the full facts correctly, instead simply highlighting the bad points and brushing over the positives.

Had NR & the Bank of England been allowed to announce this themselves, instead of you, I believe they would have been able to re-assure depositors, and I'm not saying we wouldn't of had a run, however I believe it would not have been half as bad as when you "reported the facts".

If you can't be man enough and admit you made a mistake, then perhaps you are not fit to be the 91�ȱ� Business Editor, and should be part of the staff that will be leaving the 91�ȱ�.

Having read the comments posted here i feel the following points should be made

1.As previous stated the problem with Mr.Preston's report was that it was sensationalised as most people have great faith in the reports made by the 91�ȱ� this heightened the ensuing panic in addition if Mr.Preston and other were aware of this situation hours earlier why was it not reported to the stock exchange as required by FSA rules?

2.Had Northern Rock had access to funds from the European Central Bank at a much lower rate than the Bank of England's and with total confidentiality as did the other major UK banks no one whould have known that they had a problem

The right to report and comment is one of the most basic rights in any democratic state. Where the report is by the state media and will be broadcast then obviously it needs to accurate ( which clearly it was ) and balanced /impartial ( which, on balance it probably was as well). We all know the media loves these stories and pictures of lots of people standing outside a bank are very emotive and no doubt good for ratings. They were also seriously damaging to NR. That is all in the past now. What about the future ? Other lenders may well be in the same boat as NR ( Barclays are said to have made a similar approach to the Bank of England but we don't hear about that every day ). Their uncomfortable silence speaks volumes. The truth is that when all is going well people do tend to ignore the possibilty of things going wrong ( which healthy person worries about their health ?) NR was storming ahead in a very competitive market and, but for the temporary credit squeeze caused by the high LIBOR and problems in the USA, it would ( just like its other UK competitors) have weathered the storm without any particular newsworthy difficulty. Your reporting has not caused their problems - how could it ? You rightly reported what you saw. Howver reporting in general by the 91�ȱ� ( TV and radio)and others since your initial report has been unfair and biased. How is that a minnow such as Virgin Money ( apparently worth 200M) is allowed to comment daily in the media on the situation ? Yes we would all like to buy a company that was worth billions only a few weeks ago for nothing because in our opinion it's 'worth nothing' and the NR name is 'dead' etc. This daily attack may 'glam up' the news but it is based on the comments of people who have everything to gain from trying to reduce the share price by every trick in the book with a hope of acquiring something for maybe one percent of its true price at the expense of hundreds of thousands of investors. They will 'inject' little of their own personal money into any purchase but want to collectively borrow and 'inject' a billion pounds of other investors funds. If someone offered me a thousand pounds for a house that was worth a million pounds I would tell them to go away. NR's investors should not have to put up with a daily repetion of the offer made by one of its suitors. NR's employees should not have to live under a cloud just because of name calling by others out looking for a bargain. There will be other sensible like minded lenders with deeper pockets who could step in and take over a hugely successful business. Report some positive news about the company as well ( how many depositors have chosen to stay, previous years profits and the likihood of future profits in the not too distant future ) and see what happens.

I think the attempts to blame Robert Prestons report for much of the NR panic illustrates the desperation of NR's management. They did the lending, they did the borrowing and they awarded themselves good slaries whilst boasting how well they had done. Now its all gone wrong it's Robert Preston, world markets and the BoE who are too blame. If I remember correctly it was the Mervyn King who said they were legaly obliged to make public the loans to NR. Surely therefore, it would not have been possible to conceal the loans for any length of time without attracting claims of a cover-up.

Freedom of the press is a fundamental right of modern civilisation.

Can the finger be pointed directly at Peston and the blame for resultant hysteria be laid at his feet? Potentially yes!

Instead of thinking of headlines, limelight and such, the media needs to think of the impact they have on the susceptible in our society. The vast majority of those customers that went to Northern Rock on the first day to draw out their funds did so as a direct result of the previous nights news. This then turned in to a media circus as the rest of the press jumped on the bandwagon and the cameras descended on the queues of worried people. These pictures and the inflammatory news broadcasts and paper headlines then fuelled the mass panic that the branches saw on the Saturday and Monday.

More thought should have been given before this sensationalist story was 'broken' as to who exactly would be affected. The large proportion of people in those queues were old and quiet vulnerable and as a result stood for hours in the cold to withdraw their money.

What about the staff at the branches who worked 12 hour days to handle the queues, has any thought been given to how they were feeling? No! Did anybody think of the worries they might be having regarding their job security? No!
Are the staff at the frontline responsible for the direction and financing of the bank? No!

Next time Robert, think of the impact before you make your next scoop!

The Rock and "Not Forseeable"
These guys have no shame. Yes in hindsight it is easy for us to say so. I have worked in a number of bank treasuries and scenario planning for liquidity crunches and lack of access to markets is quite standard. Their business model was always risky, with them taking that risk to keep those good margins. Perhaps they kept more capital than the other bank's in an attempt to cover this off; or perhaps paying up for a guaranteed line of credit. Either way they were willing to take a risk, they seemed ignorant of.

You are an idiot...........

Everyone from the top to the bottom of Northern Rock knows more about money, business and finance than Peston ! What a load of rubbish he has talked and now he is trying to blame everyone else for his stupidity ! IF he had not poked his nose in where he did'nt understand then things would have worked out nicely ! The Rock would still have been solid !

I have written several comments on your blogs quizzing your motives for your incessantly behaving like a prophet of doom - funnily enought these never get published.

Your unremitting and apocalyptic coverage of the NR story over the past month indicates you saw this as a career-building opportunity.

Lets hope it doesn;t rebound on you - your blog suggests you are worried it could. 91�ȱ� journalists should not be in the business of helping to drive businesses to the wall.

This is not to let the chief exec and directors of the hook - their testimony today was an absolute disgrace. Their shameless self denial was a travesty of good corporate governance. Didn't do anything wrong? I'm glad i;m not a staff at NR!!

The point is that this information was still leaked. You do say in the above that in no way could the information be kep quiet over the weekend of the 14th - 17th September. If you didn't leak it then who did, and if these were speculative journalist hunches why present them in a manner that made them seem factual without a doubt ? I think that is about time that the 91�ȱ� were brought to account by the select committee to join the BofE, FSA, and NR to account for your part in this story.

I cannot believe what I have just read in a caption to the Northern Rock story. If you "cannot possibly know whether anyone decided to take their money out of Northern Rock as a direct result of seeing my broadcasts" then you should find another job. I have no connection with Northern Rock other than sympathy for the savers who were frightened and the small shareholders who lost money as a result of the media manufacturing a story.

I am intriged by the comments "Having been given the assurance that there was nothing seriously wrong with Northern Rock’s loan book, I then felt able to broadcast".

I dont recall the headline on News 24 saying "nothing seriously wrong with Northern Rock’s loan book".

If the NR board could not foresee the trouble it was in, why was I reading about how risky NR's business model was on financial forums early this year?

The NR board are either totally incompetent, complete liars, or both.

The shameful persuance of reward in this country today is not a surprise when dealing with journo's and the media in general. Sensationalising stories or aquiring 'breaking news' and churning it out in all it's derogatory guise in not in the interest of the general public as a whole, but for profit and personal gain. Just like all walks of life when gain can be attained I guess (charity workers exempt of course)but what concerns me with the handling of this story from you Robert was the complete lack of concern of the consequences your product would cause. You knew exactly how the news would be received, with excitement, shock and panic - but more so the vulturing of competitors to get a piece of the action, and the elevation of your status for 'getting there first'. I must congratulate you on the exposure this story has given you, and hope it opens a few doors; as I truly beleive that is what you hoped would happen, secretly assuring yourself that you would be widely appraised by your piers. I feel sorry for the people who have lost a lot more than reputation in the run on the bank and the subsequent slide in shares as confidence has wained. The loss for all those shareholders both big and small and the impact on the Northern Rock Foundation cannot be measured at the moment, but is immense. You may feel you are acting in the public's interest as a reporter, but we all know in your profession impartiality has long gone and all that remains is gain.

I'd love to know the colour of the sky on the planet of some of the posters on this blog. Here is a journalist who reported the truth as he saw it - which is the prerogative of every reporter, and placed it in the context of relevant information (the state of the loan book). Then rather than be applauded for a sterling piece of journalism, the old boy network wheels out its outriders to bring the poor man down.

If Peston's employers see fit to promote him then that can hardly be held against him. Why on earth would anybody say to anyone "Don't do a good job, because if you do, you might get rewarded. Then everyone will know you did it for selfish reasons" What utter tosh.

The other impression I get from some of the posters is that the NR issue should have been handled on the quiet, away from the eyes of the public. I think the Governor suggested something like this also. This I find reprehensible for obvious reasons.

Robert, I am an avid reader of your column and I can say, without prejudice, that your reporting of events was way off the mark. However, in this respect, you are not alone. I believe the whole financial press failed to inform the public, and Northern Rock customers in particular, about the fundamental difference between a liquidity crisis and a solvency crisis. Indeed, by not educating the public (which I am sure I read somewhere - it might have been the 91�ȱ� Charter!) in this difference you made things worse and encouraged a run on the Bank. You are not wholly responsible - but you played your part - and for that you should be deeply ashamed.

I would just like to thank Robert for his insightful and honest reporting on the Northern Rock affair. Today we saw absolutely disgraceful behaviour from the so called 'executives' of Northern Rock and I have no idea how they can remain in their post and draw their salaries.

The only people who should be blamed for the decline of Northern Rock are the board and deep down they know that...

Interesting to read how polarised and pugnacious contributors' views are in the UK, about who is really responsible for what has befallen NR. In the red corner stands the management of a business model not stress-tested for snap-freezing of borrowing conditions, and whose professional integrity is now being called into question. In the blue corner stands the 91�ȱ� and its redoubtable Business Editor who blew the whistle first, kept blowing it first, and whose professional integrity is now being called into question.
It's a big question, and I reckon the biggest clue to the answer will be revealed in who resigns first - some NR high-ups or a 91�ȱ� News big name or two.
Niels, Denmark

Shoot the messenger syndrome, indeed.

Of course the run on the Rock' is still going on.

As other posters have mentioned, depositors must still be woithdrawing funds at quite a rate.

People oop North might be sentimental about the bank but the penny should drop, they must realise that they will not be able to get their money very quickly if the crisis worsens.

For some reason, the whole farrago reminds me of that time at Ainfield in The Grand National where it all went horribly wrong, and the bowler-hatted gents were revealed as incompetent.

This time it is the gents from, primarily the BoE with a supporting cast of clowns from the FSA and especially The Treasury, which has been screwing up since the 1930's when they refused to fund Harry Hawkers Hurricane (nearly a fatal mistake).

Did the European Central Bank facing the same crisis, screw up?

No they did not.

Finally, but maybe it should be firstly, as another poster pointed out (and by another individual in a letter to The Times), a schoolboy error in financial terms by the directors of NR, in the way they funded the business.

A fat payoff looms.

If it had happened in America, it would probably be in the clink, instead.

But of course, it would'nt have happened in the USA, as the rules in this area provide much more protection for depositors.

Hi "Pest on the 91�ȱ�". What a set of hypocrites this government and it's civil servants are turning out to be. They lose billions of pounds to carousel fraud via the incompetence of Customs & Excise. They spend billions of pounds on an Iraq war that many think was built on a lie. We have the largest labour black market outside the USA in the Western World per head of population, or at least London has. They shout from the rooftops while they get rich in the cellars out of sight of everyone. We may be on the verge of economic turmoil and they have the audacity to lambaste the Directors of Northern Rock. If anyone should be asking questions of the "Rock" it is the financial institutions and the shareholders. I have voted Labour for thirty years but I'm sacking this lot at the next election. Viable alternative or not.

There is no doubt a North?South divide by the State Controlled media.
Breakfast T.V. went overboard for hours,yet all banks would be finished if everyone withdrew their money.
America is over 10% owned by Arabs,if tax payers refused to pay their taxes/n.h.i,V.A.T.,our country would collapse,confidence is essential,or the result is anarchy.
The Government loses out as whilst the politicians,who have never done anything but take money from their fellow workers in their unions,or government appointments,berate the salaries,the Government has received £100s of millions annually,from taxes on £550 m. profits,taxes on the staff wages,rates ,fuel taxes,N.H.I.,dividends,and in addition the Trust has create a better life for those the State neglects.No doubt some trade unions and pension funds held shares in one of the counties most succesful banks.
The result is a foreign take over ,like legalised robbery,of a company over 150 years old,that like any company arranged Bank borrowing at penal rates.
I think the Directors have been too gentlemanly.

The arrogance of some of the posts here is breathtaking.

It is absolutely essential that reporters like Robert Preston keep on asking questions about the NR issue and others.

The financial services sector is not immune from criticism and neither should it be. In fact if it was up to me I'd beat them up much more regularly. I'm fed up with the belief that this sector is somehow above criticism. In fact it is the main source of many of the UK's economic problems and it's the duty of the Robert Preston's of this world to keep it on it's toes.

Never trust a man with Brown eyes Preston (come to think of it or the name Brown)You can not see the depth of their integrity.

How shallow of the 91�ȱ� not to expect critism for their over exagerated broad casting
which is sadly in every sector of media these days.

I am commenting as a small ordinary investor I am not talking hundreds of thousands just enough to get me by well it was enough another 20% down yesterday.

If only I could take these knives out of my back your not a Lib Dem M.P. are you?

Still you've got your glittering career ahead of you just remember all that glitters is not gold

Oh, complete rubbish. If Northern Rock was run competently there wouldn't have been a problem.

They built their whole banking business on the assumption that the credit markets would run perfectly forever, with no downturns and no crashes. A stupid, stupid assumption, especially when crashes and downturns are built into the fundamental way a debt based monetary system works.

Running the bank responsibly is not his responsibility, it is instead, his responsibility to report when it isn't.

Peston was doing everyone a favour.

WHY did Mr Peston not make hay of the fact that ANOTHER Bank had been cap in hand for money to B of E ?????- WHERE did that story go????- and WHY did Mr Peston not keep harping on about it - methinks N.R. have a case for ill judged and sensationalist story telling against you - it was not journalism!!!!!!!!

Let's deconstruct your earlier piece Robert.

'A slightly odd statement from Northern Rock this morning about how the expressions of interest in saving it - from the likes of Virgin - are all terribly preliminary and uncertain. Whoever drafted it has a Masters in the use of the conditional tense.'

Where does the 'terribly' come from Robert? Is it not sufficient to say the EoI are uncertain?

'What does it mean? Err. Well, I mentally paraphrased it as "the share price is too high". Ouch.'

Robert maybe you would like to explain why you paraphrased in this way. What is there in the statement that led you to such a mental paraphrase? I can see little justification for it.

'The point is, and to give credit where it's due, Northern Rock would not be in business and hopeful of recovering from its recent spot of bother if it were not for the Bank of England and the Treasury.'

You know full well Robert that it was the failure of the BoE to ensure liquidity in the market that caused the NR business model to unravel. The central European and American banks ensured this did not happen in their bailiwicks by pumping money into the system.

'Without the £13bn and rising of emergency loans made by the Bank and underwritten by the Treasury, Northern Rock's liquidity crisis would by now have become a solvency crisis: it would have gone bust.'

The 'Bank that Failed' was the Bank of England and the Banker that Failed was Mervyn King (see the main article in teh Economist of September 22 to 28th. Quote 'If the FSA and Treasury come out poorly from all this, the Bank of England emerges even worse....The bank of Englands' tough line turned out to be wrong, and events have forced Mr King to relent... The charge against Mr King is that his purism turned a crisis into a fiasco')

Robert why have you not also pointed to the deficiencies of the BoE - and made clear that in making funds available to NR the BoE is helping ease a problem which it played a large part in failing to avert?

'And in the absence of the 100% insurance provided to all Northern Rock retail depositors by the Treasury, the bank would find it hard to raise a bean in new money even now.'

Robert, this is true of NR and to a lesser extent to some other Banks. But given the BoE was responsible for failing to deal with the lack of liquidity in the market you should report in a more balanced way

'The Treasury is being paid for all this support - though its refusal to disclose how much makes me fear that it is not being paid enough.'

Robert, this is nothing more than michief making speculation and to what end?

Also, the putative bidders for Northern Rock - Virgin, Flowers, Cerberus - would not be remotely interested in doing a deal if the government had not stemmed the Rock's crumbling by gluing it together with public money.

Maybe , maybe not Robert. But the fact of the matter is that the government had to step in because of the BoE 'turned a crisis into a fiasco'
Robert once again we have speculative exaggeration - 'would not be remoted interested'

'So what bemuses me is why the Treasury is not taking equity in the Rock. The hard truth is that the Rock's shares would be worth a big fat zero without the support of taxpayers' money'. That's our money, to state the obvious. And there is quite a powerful argument that we should share in any upside in the value of Northern Rock, since it’s our readies that to a large extent are generating that upside.'

This is wilfully misleading of the true position. NR is paying real interest on loans so there is no handout from the taxpayer. And since the BoE (the Bank that Failed) was culpable it should not shirk a responsibility to stabilise NR. Why is this so offensive to you Robert?

'If, for example, Virgin and its well-heeled friends were proposing to acquire all of Northern Rock's existing shares at a decent premium and instantaneously terminate all public support that would be one thing. But they aren't. The Virgin consortium simply wants to heavily dilute those long-suffering holders by buying a vast quantity of new shares for the cheapest price the Rock's board would tolerate and repay the Bank of England loans over time. The risk of converting the Rock into Virgin Money would be shared with the current shareholders, and with taxpayers, unless and until all those emergency loans can be repaid and that state insurance is cancelled.'

Yes Robert of course Virgin will try to get the very best deal it can; and your kind of reporting makes it more likely they will! But it also indicates that once NR is stabilised bidders see large real value of the business. How could it be otherwise and why are you not explicit about it Robert?

'Some might feel it would be simpler and cleaner for the Treasury to be the bidder. But since it is queasy about carrying out an explicit nationalisation, it should perhaps take some of the equity action as and when a takeover takes place.
If the public-sector financial support remains in place for weeks or months after a takeover (as it will have to, as the sine qua non of a deal, whatever the Treasury may hope), the quid pro quo should surely be an option or warrant over new Rock shares for the Exchequer.
If we are paying for the elaborate care that should eventually take the Rock out of intensive care, shouldn't we get some of the spoils?'

Robert, if the taxpayer is out of pocket at the end of the stabilisation process then it seems reasonable that part of future profits/equity should be made over to the taxpayer. Why are you dramatising this simple point?

So what are we to make of your piece?. Excitable, unbalanced, misleading by omission, and strongly flavoured with an anti NR bias. Unworthy Robert.

Shame on you Mr PESTON.

Now that the Executive of Northern Rock have added their voices to the BBA and the Bank of England in laying (some of) the blame on your leaking of this story the day before they were going to announce it formally in a controlled manner, I think it is right that your role in this affair is fully and independently investigated.

What was the source of your information? What was your motive? Did you understand the consequences of how you reported the situation would affect outcomes?

Your father who is a Labour peer in the House of Lords, your friends in the party and City, your profession and last but not least the 91�ȱ� are all badly tarnished by your behaviour.

Michael Faraday 'discovered' electricity. Since then many scientists have noted that, if he had not done so, someone else would have made the discovery.
That is not sour grapes, just pointing out that the time was right, and Faraday happened to be in the right place at the right time; and the right person in that he was prepared for what he found.
And thus it was with RP and NR's approach to the BoE. Robert was ready - he had seen that the NR model was vulnerable. I had seen it myself, and all I did was read the finance pages of the papers and even then not every day.
If Robert had not broken the story then someone else would have. Can anyone convince me that the putative 'other' person would have approached the story differently? No? I thought as much.
The risk being taken was well known (a formal subject for study and examintion, we are told). Equally, it seems to me, the likely reporting and the likely reaction of the NR depositors ("rational" - MK) to the position into which NR drove itself was also known.
In another context, when I asked what I should say, how I should act, and how I should arrive at a decision, a regulator summed it up succinctly as "ask yourself, would you like to see it on the front page of [a well-known tabloid] tomorrow?". Sensationalist reporting - and how the public will react to it - has to be part of the decision-making process when business troubles loom.
Of course the assumption there is actually contained in the idea of"the position into which NR drove itself".
The apologists would have us believe that these innocents were the victims of a malign market. I don't buy that. Last time around a slew of small banks fell. This time one. That speaks volumes to me. If NR was really being 'well-managed' might matters not have come to this?
I see an example of economic Darwinism here. Times get tough, the weakest fall by the wayside. If NR was the bank that had the most trouble borrowing, does that say something about its fitness? It says something to me about a judgement on it by the other banks - did they read the runes? The weakest do not always merely fall - the runt of the litter gets physically pushed from the teat.
So full marks to RP for breaking the story, with a small penalty for being occasionally injudicious in your "take". But no points at all to Applegarth or the nebbish chairman for this affair.

Surely one journalist, even an influential 91�ȱ� one, cannot really bring down a whole bank? If thats really true, perhaps we should be concentrating on building a system which is indifferent to the reporting of one unappointed individual. I wonder how many lay Northern Rock investors actually read this blog - maybe someone could do a survey? The serious investors would surely have taken an informed decision? In any case, next time I put money in a bank I'll give them some warnings - "The value of the deposit may go down as well as up", and "Subject to credit worthiness report by King, Peston and associates".

You have nothing to be ashamed of Robert. You reported facts. If Joe and Joanne Stupid then want to panic, that's their fault. Some did withdraw funds, some did not.

I would not even call it a panic, they withdraw their savings from a bank that was in trouble - nothing stupid in that, quite the contrary.

If the public had been aware of the facts in the first place; that their savings are not 100% safe in a bank, then imv there would not have been a 'panic'.

I think this is a case of shooting the messenger.

NRK's business model was comparable to a gas guzzler. It works great (great returns) when there is fuel (funds) available, but when the pumps run dry (liquidity dries up), it'll be the first to grind to a halt.

In the fuel crises, was BP blamed; petrol stations blamed; gas guzzling owners blamed? Nope.

Keep up the great reporting Robert, the public is in need of much much much more education.

Regs, Andy

It was no surprise that NR executives behaved,as they did,in front of the Parliamentary Committee today.Borrowing short to lend long,seems to be something they though held no dangers.They seek to blame everyone except themselves.They are a total disgrace.

pity you did not stay 'schtoom' last month and on many other occasions -
YOU started the 'run' along with all the other ignorant and incompetent media clowns.
Reporting from outside branches in the South!? - normally you 'clowns' are in the thick of it - could you not find your way to the 'hub' in the North to give a more balanced report. I'm sure there are many good 'Northern' people who would like to talk to YOU.
About time YOU were regulated in your method of 'reporting'- let's start with you naming your contact(s)/source(s).
I would have thought a reporter/editor? in a position such as yours would also be investigating the other banks - after all we all know Northern Rock has not and is not alone in requiring loans - be very interested to learn what problem you have in giving the other banks some air time?

If Robert Peston had not been born Northern Rock would be a viable if damaged concern, discuss.

I understand that the media form a massive industry wherein there are too many chasing a headline for self-glorification. Northern Rock is an example where judgement should have been weighed against personal ambition.

The 91�ȱ� has been a major contributor to the destruction of Northern Rock. The disgraceful reporting has been unbalanced with almost exclusive coverage of the articulate, affluent middle class queues in and around London; why no reports of branches with no queues, people not withdrawing their deposits, and customers in Newcastle - lazy reporting or biaised reporting? The true story was "all deposits in Northern Rock are guaranteed" - I do not remember this as a headline, but then only a crisis makes a good headline.

How do you and your mates sleep at night Robert Peston?

I have nothing but admiration for Mr Peston. As a journalist, he did report correct and up-to-date information. Do you want journalists to keep quiet ?
NR is built on an unsound business model and its collapse was an accident waiting to happen. Had it not been for the Bank of England saving it by tax payers money or printed money or both, it would have gone bust.
No one is to blame apart from the bank's board. They take all the blame and they should be punished.
The bank run was an absolutely normal thing to happen. If you had money saved with the bank, you would have done the same.
I have no trust in the FSA, no trust in the current banking system and definitely no trust in Virgin's attempt to get tax payers money to help him own NR under the banner of "saving an institution".
The root cause of all the banking sector problems is the banks' ability to give money to whoever wants it, backed by the central banks who do the printing, central governments who do the bailing out and the FSA and the like who do the blind eye.
When everything collapses, it is left to tax payers to do the paying up.

Posts 2 and 8 are spot on. The 91�ȱ� sensationalised the story on September 13 which caused depositors to panic. Many have quoted the 91�ȱ� news as the reason for seeking to remove their funds. The 91�ȱ� should not have made this a screaming headline when Mr Peston knew full well that the NRK was solvent. Many of the comments here and elsewhere suggest that many people thought that the NRK could go bust. Mr Peston's own slurs included words such as "Wreck", and headlines such as "Could NRK go bust" fuelled the fear and panic.

Mr Applegarth and co said yesterday it was the run on the bank that effectively paralysed it. The BoE was doing its job (albeit belatedly) in providing the funds. The BoE should have injected liquidity into the markets much much sooner, as the Fed and ECB did, rather than cerebrally pontificating on the moral values of doing so. It is the duty of the BoE to keep the markets running smoothly.

Where Mr Peston and Co are further at fault is in not giving the same screaming headlines to the measures designed to allay depositors' fears - namely the decision by the Treasury to guarantee depositors' funds in full for existing NRK customers, and for new customers. The latter received no mention at all on 91�ȱ� news. Yesterday's interview of the Board with the Treasuy committee had the same sensationalist headlines as September 13. This was a monumental mistake by the 91�ȱ� - if bungling the reporting of the Queen leads to resignations, so should this episode.

Yeah, right. The rock got its comeuppance because of a shaky business model that depended on unfettered access to cheap credit. But no, it’s the evil 91�ȱ� and the rest of the evil media who in reality caused all this… What a load of tosh! How about the good ol taking responsibility for our action (bit old fashioned nowadays). Who are they going to blame next? Putin, the president of Iran, the Euro. Ridiculous.

Mr Peston as an ordinary man with no special nowledge of Banks & business but with a keen interest to find out. I think you explain things well & try your best to be fair to all sides. Northern Rock are a disgrace & have only themselves to blame. Ignore your detractors - The general public are constantly fed rubbish from every quarter & dislike GREEDY BANKERS. We don't trust them so when things seem dodgy we run for the exit(who wouldn't)
Keep up the good work.
Regards.

As an ex-Rock emplyee I can tell you that the crisis at Northern Rock comes about not as a result of your sound journalism but mainly due to a culture that would not allow any challenge to the view that Applegarth, Baker et al were always right and had nothing to learn from colleagues lower down in the food chain. Those of us who did try to challenge things were immediately treated as 'outsiders' who didn't have the best interests of the bank at heart. Ignorance, as they say, is bliss.

Blame the NR Board all you like, they did nothing wrong. The 91�ȱ� knew full well what it was doing and what would happen. The coverage was not balanced and narcissistic. But hey you can't blame a journo for trying find a way of elbowing his way up the greasy pole. That's life and besides, its common practice at the 91�ȱ� these days as we have seen by the number of departures of late. What's amusing is that the Government's own mouth piece played a major part in creating the "first run on a bank in a 150 years" and as such forcing the Government to open its coffers to come to the rescue of the 91�ȱ�'s latest victim. Enough of this nonsense - the NR shares should have been suspended the minute NR approached the BOE.

Hello again Robert,

As one of your early critics in respect of the way the story was presented on the main TV news on 13th September, may I first commend you for having published the criticisms on your blog and for 'fessing up to their existance in your news report last night.

I note your comment above that:
"I’ve reviewed our broadcasts of the night of September 13. And if I have any doubts about what I said it is that – in the light of the subsequent run on the bank – I may have given too much reassurance to depositors rather than too little."

....and I put it to you that you are focusing over-much on the technical issues of having put both sides of the argument - and too little on the WAY in which the story was presented. I have no quibble at all with the VT package that started the piece on 13th September, which seemed well-balanced. However, the way in which you responded to the live interview with Huw Davis was inappropriate, in my opinion, and used a significant number of overly-emotive phrases which, taken together, helped engender a feeling of panic amongst viewers. Some examples of this were:
"extraordinary emergency funding"
"fear stalking the markets"
"heaven alone knows"
"[the Bank's intervention] will worry people tomorrow"
"no suggestion.....fundamentally bust"
etc etc.......

There may well have been "no suggestion" that Northern Rock was "fundamentally bust".....but there was every indication from the panicky impression given by your interview that you were just saying that and didn't actually believe it! The subtext of your comments was quite clear - get down and pull your cash out!

Incidentally - why is the news clip of 13th September apparently truncated on your blog?

I put it to you that your judgement on presenting the Northern Rock story (which I fully agree was a matter of public interest and a legitimate topic for disclosure, albeit earlier than the bank would have wished - though I definitely think it got FAR too much attention in the 13th and in subsequent news bulletins!) was coloured by your long "watching brief" regarding the potential for problems at Northern Rock. It is my view that you got too close to the story and became patently over-excited by it, which in turn had a detrimental effect on the viewers' perception of balance in your interview on the 13th!

I congratulate you on your foresight - and indeed was unsurprised at problems myself, whilst being amazed at the fact that the main catalyst was the failure of the interbank market (which, I'd suggest, had more than a little to do with the fact that two major UK clearers were fighting over ABN AMRO at the time and therefore unusually keen to husband their cash!). However, I'd also suggest that you would do well to review your presentational style! What comes over as entirely fair comment when in print can convey something much deeper when on TV!

regards

Finance is built on confidence. Even on the means of exchange i.e. the £ in our pockets. Remove that patina of confidence and the edifice collapses.

A reporter 'leaking' news in a sensationalist uncontrolled manner can destroy confidence and did.

And for all the new experts out there - can they tell me exactly what was specifc about how the Rock's business model of borrowing short and lending long was flawed? Can they tell me of just one financial institution that does not do this? I thought not.

And many people do not seem to realise that if the BoE did not support them now, the Rock would be forced to call in its many mortgages to balance its books - that would be an even less edifying sight than queues of depositors.

Mr Peston - where did you get your leak from again?

I'm interested in Tino's observations in post 64:
"....a culture that would not allow any challenge to the view that Applegarth, Baker et al were always right and had nothing to learn from colleagues lower down in the food chain. Those of us who did try to challenge things were immediately treated as 'outsiders'"

As someone who was once extremely close to various cases of financial fraud and mismanagement over the last 20 years, I'd say this sort of situation was common to them all: "groupthink" from the people with the power and rejection of any concerns or counter-arguments. This is especially prevalent in modern banking, in my opinion, because so few people actually understand the details of many parts of the business and most are thus ill-equipped to win arguments with those who have convinced themselves that they are right.

And, furthermore, the Regulators are no better-equipped!

regards

I think you all deserve each other. As a seasoned financial services reporter you would be fully aware of the consequences of your reporting. If you were not then how the heck did you get the job as 91�ȱ� Business Editor? This is a highly regulated and conservative world and appropriate measures could have been put in place to avert panic. In other words NR could have been given time to prepare themselves for the impending events.But I suspect you saw the glory moment of exclusivity. Lets face noone knew who Robert Preston was in early September.
As to NR well they are responsible for putting all of their eggs in one basket to drive up shareholder value and increase market share.
At the end of the day a large institution who have done nothing illegal has been destroyed, shareholders have lost hugely and the NE of England has lost 'one of it's own.' Sleep well!
i suggest you ALL go fly a kite!!

Mr Peston, I can understand you wanting to blow the whistle on a company if human lives were at stake, but surely you knew that your broadcasts would cause panic in the way that it did ! You did not act in the interests of the public in this case and subsequently fuelled the panic that lost shareholders millions of pounds and also put 6500 jobs at risk. Hope you are proud of yourself. NEWS IS NOT ENTERTAINMENT !!!

I have to admit that I'm writing this post having given up reading the exsisting posts at about #29.

To the idiots who want to blame the INTERNATIONAL liquidity crisis and the subsequant consequences for the British Banking sector (and for Northern Rock inparticular) on the 91�ȱ�, all I can say is that such thinking leaves me speechless. Such stupidity and ignorance so proudly displayed.

Spot on poster 65.

That Northern Rock's management were foolish to believe that their business model was sound, and to fail to stress-test it against a scenario which had already happened 30 years previously is undeniable.

The regulatory system could well have worked better and avoided the need for NR to go to the BoE.

The compensation scheme for depositors should be more generous and better publicised.

But the language Robert used, the excitable style of the interview, and the way that the story was presented as the "exclusive" headline on the News at 10:00 on Sep 13th played a major role in creating the queues and panic the following day.

Besides the issues of the Rock's business model, and the regulatory bodies' actions, what undoubtedly heightened the crisis was the sensational way the developments were presented in news programmes. It appeared that 91�ȱ� reporters became hyped up by the developments. With often 2 or 3 reporters contributing, plentiful images of queues, often of elderly customers, emotional reporting (heat) was plentiful. Hard information (light) was in short supply and simply crowded out. More mature and balanced reporting is needed. Goodness knows what you would make of a real crisis!
Interesting that for the 6 o'clock news last night, editors decided not to report the criticisms made at the Select Committee hearings of its contribution to the sense of panic. By the 10 o'clock news this could no longer be ducked. If you seriously believe no-one 'decided to take their money out of Northern Rock as a direct result of seeing my broadcasts', the 91�ȱ� should find someone with better reporting judgement.

Obesity 'not individuals' fault'

91�ȱ�'s Robert Peston is mainly to blame, the report says.
Individuals can no longer be held responsible for obesity and government must act to stop Britain "sleepwalking" into a crisis, a report has concluded.
Northern Rock's Directors should have foreseen the risk to the nation's health and taken appropriate action in advance.
Everyone should have foreseen all possible outcomes of all possible risks and the whole nation should resign.

My comment on the finger pointing that is going on is this.

Not only did the 91�ȱ� 'Miss Report' the situation stating that 'Northern Rock was in crisis' - all it had done was to secure funding from another source and the only consequence to this would have been that it's lending rates would have gone up - but you missed the real story!

Barclays goes cap in hand to the Bank of England for £2 billion to shore up one of its hedge funds - that no doubt had in its possession a large US Sub Prime loan book. Now I don’t know about you but this seems like a large sum of money to me and would be worthy of at least a mention in the news. But the matter goes virtually unnoticed.

Barclays then goes cap in hand again to the Bank of England for another £2 billion because the first £2 billion was not enough! Now surely someone will report this – it has to be newsworthy – one of our biggest banks borrowing money not once but twice!

Again hardly a mention in the press.

Now poor old Northern Rock, doing what is right for its customers (not buying up American Sub Prime Loan Books to make a quick buck unlike some) has to go to the Bank of England to arrange a facility just in case the other banks stop lending to each other altogether and it runs out of funds – note the word facility.

At this point Northern Rock has not borrowed a penny, unlike the good old boys at Barclays.

This in itself is not really news worthy as all that would have happened is that Northern Rock’s mortgage rates would have increased due to the fact that the Bank of England will charge higher interest on its lending. Northern Rock would not have collapsed or gone bankrupt or any other of the fantastic headlines that appeared in the press.

But its not really the press’s fault as their ‘experts’ do not really understand what they are talking about and got fed the information from the very institutions that were engineering the so called crisis.

The news – Northern Rock has to arrange funds from the Bank of England as its business model is ‘broken’!

The very next day ‘queues of people wait to withdraw their life savings from the beleaguered Northern Rock!’ and so begins the first run on a British bank for 140 years.

Then to add insult to injury my favourite man, Mervyn King goes before the House of Commons Treasury Select Committee and states that he did not step in before as “it was a "difficult balance" to strike between the need to secure the integrity of the banking system, and avoiding "moral hazard" - where banks believe they can behave irresponsibly because they will always be bailed out.”

Now I don’t know about you but the only banks he could be referring to here are the ones that dabbled in the American Sub Prime Loan Books without understanding the market. But everyone took him to mean Northern Rock but how on earth did Northern Rock act irresponsibly?

There is also a more sinister development that has come to light recently and that is the same ‘idiot’ investment bankers that thought that they could make a quick buck from the American Sub Prime loan books are now actually making a profit from the ‘Short Selling’ of Northern Rock shares. A situation that they themselves engineered to protect their own backsides!

Another point to make is that during this 'crisis' Barclays were in talks to buy ABN Ambro Bank. I would suggest that bad press for them at that time would have damaged their chances? I know that the deal fell through in the end - maybe what comes around goes around - but Barclays would have tried to manipulate the press.

It is my belief that the FSA and Bank of England have colluded to protect Barclays (one of our oldest and most powerful banking institutions) at the expense of Northern Rock. Someone had to fall on their sword and it was the youngest and least influential of the banking ‘magic circle’ that drew the short straw.

We all know that the FSA is heavily influenced by the shiny suited, big car and large house investment banking fraternity but until now I was unaware that their influence stretched as far as the Bank of England and that Mervyn King could be brought for 40 peices of silver.

What we need now is a full public enquiry into the actions and inactions of the FSA and Bank of England and also the undue influence of the larger banks on the financial system.

We cannot with all credibility carry on the way we are – the system is being massaged by those who have the most power at the top table and they are being aided and abetted by those that are charged to protect us the general public and with no thought for the consequences for us the general public!

Only a complete idiot would not realise that by publicising the fact that Northern Rock had to turn to the Bank of England for emergency funding, this would cause absolute panic and a run on the bank. All banks from time to time have liquidity problems but it would do immense harm to make this public, as everybody would be rushing to take out their savings and the banking system would face collapse. The reputation of a well respected bank has been destroyed by a publicity hungry journalist, who has sensationalised the liquidity situation of one bank because the topic is "flavour of the month."

I am in agreement with the vast majority on this BB. Peston's reporting was indeed sensationalism with glee and he is to blame for the run on the bank as is the 91�ȱ� who allowed this nonsense to be wrote and broadcast. I do not exonarate the
NRK board in any of this, they are also at fault for not understanding their own business, but their business model did not cause the run
on the bank. I believe the government should call for a public enquiry into the whole debacle.

It's interesting that no one is inclined to blame the savers for the run on the bank. If enough people do a stupid thing, are they absolved of their stupidity?

I want to give you my support.

The real blame lies with the directors for following a flawed model which many experts and commentators (such as yourself) have been warning about for sometime.

It is entirely right, that we, the public should know when things are about to turn belly up, especially since things have got so complicated, ordinary Joe will not understand the consequences of some situatons.

It is good to see that you have got so much under their skin, big corporations have been having the media their way for way too long!

I've seen northern Rock for what they are when they started dong 0.5% mortgages for 3 months, just to get to the top of the tables! A cynical business model, designed to hide the truth from the public and make as much money for themselves at whatever the cost.

I don't believe the Bank of England should have stepped in at all!

Keep up the good work, Robert!

I am in agreement with the vast majority on this BB. Peston's reporting was indeed sensationalism with glee and he is to blame for the run on the bank as is the 91�ȱ� who allowed this nonsense to be wrote and broadcast. I do not exonarate the
NRK board in any of this, they are also at fault for not understanding their own business, but their business model did not cause the run
on the bank. I believe the government should call for a public enquiry into the whole debacle.

It's interesting that no one is inclined to blame the savers for the run on the bank. If enough people do a stupid thing, are they absolved of their stupidity?

Decided to spend a few hours looking at background of recent reports on NR.

Aug 16 --- (From Peston's blog) The stock to watch, however, is Northern Rock. As one of the most aggressive lenders in the UK housing market, and heavily dependent on funding from the bond market, its shares have fallen almost 50 per cent from their peak of the past 12 months: a pretty soft rock.

Sept 13 --- The 91�ȱ� reveals that Northern Rock has asked for and been granted emergency financial support from the Bank of England, in the latter's role as lender of last resort. 91�ȱ� Business Editor Robert Peston says Northern Rock is not in danger of going bust and there is no reason for its customers to panic. But he adds that "the fact it has had to go cap in hand to the Bank is the most tangible sign that the crisis in financial markets is spilling over into businesses that touch most of our lives".

Sept 20 --- Facing accusations of "being asleep at the wheel", Mr King said it would have been "irresponsible" to have intervened earlier to save Northern Rock. He says he would have liked to have offered financial support to Northern Rock in secret but that UK and EU regulations made this impossible.

Oct 16 --- Applegarth said the 91�ȱ�'s exclusive report on 13 September, that the bank would need to seek emergency funding from the Bank of England, had scared his customers."It caused us immense difficulties," he said.

My conclusion.

This situation is that the business strategy of the Rock which depended on income from the purchasing and selling of bonds failed. The FSA & the Bank of England should have acted in July when they knew some of the situation. They should have told Northern Rock in July to stop lending and consolidate their capital for the rough ride they knew was coming. We appear to have all these regulators but they all react after the damage is done.

If I were you I would be unconcerned about the comments. Please keep up the good work.

Only the English could make this story into a North/South divide, (and by implication, class), issue! The reporting of the problems at Northern Rock was valid because it is right that people should know that there are problems at the bank where they have their savings. It is up to them if they decide to remove those savings or instead to rely on the bank to make good any losses they might sustain in a worst-case scenario. Just not knowing about a problem does not make it go away. Some people choose to delude themselves, such as the American reporter on CNBC who appeared incredulous that "a developed economy should have a run on a bank", obviously she failed to remember the S&L debacle of the 80's.
Make no mistake the US approach of bailing out the financial sector is going to have serious implications in the future. The latest of which has Hank Paulsons fingerprints all over it, (now someone remind me, where did he work before)? What an ingenious plan, the US banks are having trouble selling debt to fund their SIV's so why not allow them to create a new SIV with a catchy name that will buy up the debt that no-one wants to buy and sell it in a new wrapper. Surely everyone knows that the answer to any problem is to add more credit.

Only the English could make this story into a North/South divide, (and by implication, class), issue! The reporting of the problems at Northern Rock was valid because it is right that people should know that there are problems at the bank where they have their savings. It is up to them if they decide to remove those savings or instead to rely on the bank to make good any losses they might sustain in a worst-case scenario. Just not knowing about a problem does not make it go away. Some people choose to delude themselves, such as the American reporter on CNBC who appeared incredulous that "a developed economy should have a run on a bank", obviously she failed to remember the S&L debacle of the 80's.
Make no mistake the US approach of bailing out the financial sector is going to have serious implications in the future. The latest of which has Hank Paulsons fingerprints all over it, (now someone remind me, where did he work before)? What an ingenious plan, the US banks are having trouble selling debt to fund their SIV's so why not allow them to create a new SIV with a catchy name that will buy up the debt that no-one wants to buy and sell it in a new wrapper. Surely everyone knows that the answer to any problem is to add more credit.

I like and agree with Mike Harper's analysis!

From my own perspective I view the whole 'market' as run by speculating 'barrow boys' with no real concept of input+work=outputs.
There are, and will remain, tremendous opportunities for thieves and vagabonds, some representing household names, to practise their dark arts!

Peston has sensationalised the situation and he must bear some responsibility of the run on the Bank(although he does not for the clear errors of the Rock!). Will he next be telling us that what happens on TV, and then in real life have no correlation?

The poor will surely foot the bill, yet again.

Never let the facts get in the way of a good story!!

I like and agree with Mike Harper's analysis!

From my own perspective I view the whole 'market' as run by speculating 'barrow boys' with no real concept of input+work=outputs.
There are, and will remain, tremendous opportunities for thieves and vagabonds, some representing household names, to practise their dark arts!

Peston has sensationalised the situation and he must bear some responsibility of the run on the Bank(although he does not for the clear errors of the Rock!). Will he next be telling us that what happens on TV, and then in real life have no correlation?

The poor will surely foot the bill, yet again.

Never let the facts get in the way of a good story!!

Dear oh dear...

I am astonished by such negativity here. How can one man be responsible for the demise of a company?!

Scaremongering does have certain effects but didn't you ever hear the phrase: "don't believe everything you read in the paper?!"

a)For those that comment with clear business and financial acumen - one should never jump the gun on one source of information as you should know. If Mr Peston had not covered this first, someone else would have done it. Therefore, those at this level cannot blame him alone. Upon seeing such news I weighed up the situation from numerous info. sources and left my savings where they were.

Journalism is about creating debate, stating facts or delving deeper into an issue...thankfully we are not a one sided system as in the US.

b) The fact that many savers were scared by such news shows the fault of NR that it was not clear enough in knowing what it could secure in savings and by not communicating this in a simpler way for all savers to understand, rather than the statements used that were littered with jargon. This news would have always caused savers to panic. The BOE should also have made a public statement to calm the storm before it did.

I ask myself where such criticism stems from? Could it be that such comments come from those who have lost out financially in this situation? They are rather more doom and gloom I fear than the man having the finger pointed at him.

Carry on old chap. Sleep soundly at night. This will sort itself out. Many blog comments appear to be no more than the negative herd mentality which overcame the savers and led them to withdraw their savings.

An NR saver AND Investor

..........PESTON CRISIS LATEST.......

BEEB'S PESTON ON DEFENSIVE OVER ROCK RUN ROLE!
....................................

Robert Peston, 91�ȱ� News' Business Editor, has defended his 'sensationalist' leaking of the Rock's BoE loan, wrong-footing an official announcement and allegedly precipitated the bank run. In an unprecedented move, Peston turned cap-in-hand to the public, via his blog, in an attempt answer the many critics of his 'excitable' and 'misleading' reportage the night before the run began, and the subsequent coverage as the run developed.

STICKING TO FACTS

Mr. Peston's statement skirted the real issue by sticking carefully to facts, detailing the content of his reporting and the general financial situation at the time. However this does not address critics' key arguments concerning the tone of the piece, and the use of 'alarmist' phraseology during his commentary in the studio.

ODIUM

Response to the blog has been both positive and negative, but much odium has been laid at the author's door. And, as we all know, when enough mud is thrown some of it sticks. This cannot look good for Peston. With fear stalking the corridors of the BEEB in the wake of the cull announced recently, and fakery scandals seeing the demise of other BEEB broadcasters, one wonders if Mr. Peston will be there much longer. Can the ailing national broadcaster afford to keep him in post?

WHAT IF PESTON GOES?

Should Peston be ousted then there is no immediate cause for concern to his creditors. However, some analysts think his name is 'tarnished' so he may find it near impossible to get similar work in the future. The bank Mr. Peston has his mortgage with may be worried by this, and, despite the fact that this could be an exceptional and short-lived situation, not feel inclined to let significant arrears accumulate before taking action. Any substantial loans or overdrafts would also start looking decidedly shaky.

.....................................

The easiest way to convince people that you were not just carried away with your 'I told you so' attitude to NR is to show us that you gave equal coverage-and used the same language-to cover the situation at other banks, such as Barclays. Plus, those 'rival banks' Applegarth mentioned yesterday who could go to the European Central Bank instead of the BoE (presumably as- like Abbey -they are now owned by the Spanish etc?).

This is a good opportunity for you-instead of writing articles defending your journalistic integrity-you can demonstrate it. Please investigate these stories and report back to us whether other banks have secured (or tried to) a lending facility from a central bank.

As far as I am concerned Peston has done nothing out of the ordinary here. His reporting is inline with all 91�ȱ� news reporting these days - too many opnion's, not enough facts. This is particulary dangerous in when reporting in a regulated field.

Would it have been best advice for an IFA to advise or even imply that it would be the best option for a saver to go and withdraw their funds from NR (incurring penalties for doing so)? I think not, and I am sure the FSA would be knocking at his door very soon. Perhaps it's about time financial journalist were regulated too? Not something I would favour for the free press but we certainly wouldn't be discussing the sensationalist style of your reporting Robert.

Personally I would rather you reported facts rather than opnion and let me make up my own mind. Lets not forget that NR isn't the only British institution currently supported with public money.

It is the responsibility of the individual to become informed.

This is your hard earned money. To entrust it with another individual or corporate entity, and not take the time to accumulate knowledge on what are your risks is inexcusable. There is a wealth of information available to you today via multiple sources at little or no expense. This will guide your decision making & understanding of the playing field. Even then the outcome of your well researched decision may be a disaster. Nothing is easy, especially where money is at stake.

However, the more informed the public become the more they can ask clearly directed questions. They can spot a blatant cover up, and seek the truth. They can apportion blame. And best of all, they can Demand, as a group of informed individuals, that new laws and safe guards are put in place. And when these corporations and governments are faced with the power of the electorate, an informed electorate, they will not pay the usual lip service, they will be forced to act. It's your money--these sharks want it--make them earn it.

The Gov of the Bank of England actually qualified his comment that "it was rational for depositors to want to withdraw funds from NR" with the highly significant but conveniently forgotten phrase, "Once a run had started ...".

And who started the run? Robert Peston with his sensationalist tabloid-style reporting, of course.

For him now to be economical with the truth in trying to justify himself is quite astonishing. So why is he not offering his resignation?

Peston ! You are not the right person to pretend to understand any sort of news reporting on finance nor business news. We pay for the 91�ȱ� and still expect some true facts and figures not just stupid personal opinions! You have not at any time shown that you understand how any bank works at all ! The ROCK would still be a great profitable institution without your interference and no different than all other borrowers, great and small, who have had to adapt to recent changes in wordwide loans. They are in trouble now because of YOUR claim to fame rather than the American mortgage problems that ALL banks are temporarily suffering from. I really do hope that you have not permanently damaged anyone connected to NR from the top man,the workers,the shareholders,through the first time buyer to the pensioner saver at the bottom. You were, and are, WRONG !

Short answer yes, name your source and resign

Ooops - while Robert has been SO interested in this story - he FAILED to see what was happening on his home ground.
Just shows how incompetent he is - calls himself a business editor!
How could the 91�ȱ� get into such a position?
So much for the 91�ȱ� management and their business model!
Could your job be one of those to go....................I wonder?

It does rather seem that a lot of the 91�ȱ� journalist blogs are used by the journalists to respond to criticism they have recieved.

I'm not sure whether this is a big deal, or whether this website should be about the news rather than the journalists, but they invariably read as whiney and defensive.

Yes your sensationalist reporting and that of your fellow 91�ȱ� colleagues was extremely damaging to the Rock - Grow up and admit that for personal glory and self satisfaction you chose to focus all your attention on one bank, ignoring the activities of any others (Barclays for one!) and gave a very biased report. Your colleagues are not blameless either. I suppose it was just coincidence that the only people in the queues outside the branches willing to give an interview happened to also be the oldest!
Please resign so I no longer have to see your smug photo on the 91�ȱ� website.

Kind Regards,
The Blue Peter Cat (Socks/Cookie*)
*delete as appropriate.

I'm amazed that so many of those passing comment believe that the 91�ȱ� and Robert Peston have so much power in financial markets.

The reason why Northern Rock is in its current position is because Mr Applegarth's erstwhile friends in the banking and financial world stopped lending him money.

I wonder if the Select Committee (accused of grandstanding by Sir Derek Wanless the other day) will ask them why they took this commercial decision?

As usual the posts contain a mixture of the intelligent, the inane an the inarticulate.

No one is suggesting (as some of the inane seem to think) that we should stop free reporting, not is anyone really suggesting that RP was responsible for NR's problems.

What is being very cogently argued in some of the more intelligent consdierations, and what i agree with , is that RP's increasingly sensational style and his failure to report in a balanced manner made what could have been a small number of withdrawals (and hence not newsworthy) into a panic.

Lets also make it clear that this is not about 'bringing down' one bank, or upsetting businesses, a prolonged run, particualry if it had resulted in the failure of NR could have impacted on other banks, and ultimately the entire economy.

The inane simply do not appear to appreciate that such an event qwould have impacted on everyone.

It is this, the potential economic ruin of the country, which RP should have considered when deciding how to word his story....and then stuck to a balanced factual report.

Maybe RP's next blog will be a report on the disciplinary action taken by the 91�ȱ� against him

Now the most important issue is which other banks are going to have problems. Do you know already? If so please let us know.

Peston I hope your job is one of the 2000+ jobs to go, until then I am sky.
As for the blogs - just shows the country still has no idea of what happended or is happening, I have never read so much rubish.

The Governor of the Bank of England actually qualified his comment that "it was rational for depositors to want to withdraw funds from NR" with the highly significant but conveniently forgotten phrase, "Once a run had started ...".

And who started the run? Robert Peston with his sensationalist tabloid-style reporting, of course.

For him now to be economical with the truth in trying to justify himself is quite astonishing. So why is he not offering his resignation?

It was also astonishing how the 91�ȱ�'s coverage of the Commons Select Committee proceedings failed to pick up on some important issues and instead focussed only on the worst of the negative soundbites. For example, why was there no coverage of Applegarth's assumption that there would be a flight to quality when the US sub-prime mess started to break? Even Peston has acknowledged the high quality of NR's mortgage assets, so why was this assumption unreasonable as part of a sound overall business strategy?

I did read somewhere that only a small number of branches of Northern Rock had customers queueing to remove deposits. If that is the case why did the 91�ȱ� not present a truly balanced report and state that out of (say) 300 branches only (say) 10 were experiencing problems?
More emphasis could have been made regarding the loss of interest many depositors would suffer by closing accounts early.
Having said that I was involved in the finance sector in the 1970's and remember the cause then. - Borrowing short and lending long. The question must be asked why the Bank of England and other regulatory authorities permitted Northern Rock to continue such a policy.
Companies with which I have been involved were funded by Merchant Banks who were insistant on balanced terms of funding to ensure an even match to long and short term loans. That is one of the basic principles of banking.

No one is denying the failings of Northern Rock Management. The issue here is that Mr Pestons sensational reporting and subsequent media hype on the story that he broke (as he keeps proudly telling us).
I wonder how many of the posters here are actually NR investors. I am and from my point of view whilst things seem to be on an even keel now I've had a few sleepless nights as a result of it all,
Whatever the shortcomings of the board can anyone tell me what I've done wrong, to deserve the 'serves you right' 'got your come uppance' comments in these posts? I put my hard earned cash into a bank giving me a good rate of interest no different in my view to Barclays, Halifax et al. I haven't speculated on the stock market with its inherent risk, i've put it in a savings account of a bank that i expect to be covered by all the safeguards and legislation put in place by the government. So why should i lose my money?
The question i have for Mr Peston is for whose benefit was the story broken?...nor NR investors, not the public in general who couldn't care less as it didn't affect them, not the financial family, ..so who?

I am completely agree with what the CEO and Chairman of Northern Rock said, since the report by 91�ȱ�, peoples started to be panic, why cant 91�ȱ� wait for the following Monday for formal announcement from both Northern Rock and BoE. To add more damage to Nothern Rock reputation, since then everytimes when 91�ȱ� reporting any news related to Northern Rock on their website, the author had been using the picture of people queuing outside Northern Rock branch and quoting the following 90% in the news related to Northern Rock in 91�ȱ� business section:-

'Northern Rock ran into trouble last month when it faced a liquidity crisis as a result of the global credit crunch - which began in the US.'

When there is some other bigger news which some readers might be interested i.e. battle between Barclay and RBS in ABN takeover, not much news but 91�ȱ� went on to report more damaging news about the Northern Rock (borrowing up to £10b from BoE) instead of reporting on the biggest ever takeover of a bank in history.

Where it Mr. Peston who was being paid £3m bonuses etc. I might feel
more sympathy for the board of NR.
My modest proposal is that execs of businesses should have the option of
either placing their bonuses and pension contributions in Escrow for 5 years or having them taxed at a punitive rate. The regulators would have the option of making them forfeit should fraud or gross mismanagement be proven and distributing them to the usual victims i.e. pensioners, bond and share holders.

The financial system is ultimately dependent on confidence in the ability of financial institutions to deliver on their obligations.

If, for any reason at all, be it a sound one or not, confidence in a bank disappears, then there will be a run on that bank, and unless somebody intervenes to restore confidence, that bank will fail.

So - did thousands of depositors suddenly, and simultaneously, decide that they didn't like Northern Rock's business model, having looked at its balance sheet, financing sources, and cashflow? I think not.

Sure, the Rock's directors are culpable for the situation which led to them having to go to the BOE in the first place. But it does not necessarily follow that retail investors needed to panic.

The panic was caused by the 91�ȱ�'s sensational presentation of the sitation - I wouldn't particularly blame Robert Peston for breaking what was after all an important financial story - but I would blame the editors for putting it at the top of the news agenda on the 10 o'clock news in teh way they did. It could easily have been presented in a thirty second slot towards the end of the news, along with the other financial market stories. This would have broken the story but not caused a panic.

The 91�ȱ� has to recognise the part that confidence plays in a financial system, and how easy it is for a large media outlet to destroy confidence.

If the 91�ȱ� led with a story tonight that "there are rumours in the market that XYZ bank may be in trouble" - then XYZ bank would indeed be in trouble.

I think that Mr Preston and his team are definately guilty of 'sexing up' the report on Northern Rock and also 'sexing up' the aftermath. He and his team can point to other factors and also to their 'balanced' news item but the fact remains that the language used was used for a reason - to make the story seam more important than it was. The fact of the matter is that the Northern Rock arranging a facility with the bank of England is simply not that important.

What I also think is that they managed to completely miss the more important story. Whether this was by design, accident or due to the fact they were being fed miss information is also a matter of concern.

The Real Story.

Barclays goes cap in hand to the Bank of England for £2 billion to shore up one of its hedge funds, that no doubt was holding at least one US Sub Prime loan book in its portfolio. Now I don’t know about you but this seems like a large sum of money to me and would be worthy of at least a mention in the news. But the matter goes virtually unnoticed.

Barclays then goes cap in hand again to the Bank of England for another £2 billion because the first £2 billion was not enough! Now surely someone will report this – it has to be newsworthy – one of our biggest banks borrowing money not once but twice!

Again hardly a mention in the press.

Now poor old Northern Rock, doing what is right for its customers (not buying up American Sub Prime Loan Books to make a quick buck unlike some) has to go to the Bank of England to arrange a facility just in case the other banks stop lending to each other altogether and it runs out of funds – note the word facility.

At this point Northern Rock has not borrowed a penny, unlike the good old boys at Barclays.

This in itself is not really news worthy as all that would have happened is that Northern Rock’s mortgage rates would have increased due to the fact that the Bank of England will charge higher interest on its lending. I would also like to point out at this point that Northern Rock have not been 'given' anything and they have certainly not been 'bailed out by tax payers money'. Northern Rock will have to pay interest on every penny that they have borrowed. If the figure of £13 Billion are correct then this will equate to nearly £900 million per year. Northern Rock would not have collapsed or gone bankrupt or any other of the fantastic headlines that appeared in the press.

But its not really the press’s fault as their ‘experts’ do not really understand what they are talking about and got fed the information from the very institutions that were engineering the so called crisis.

The news – Northern Rock has to arrange funds from the Bank of England as its business model is ‘broken’!

The very next day ‘queues of people wait to withdraw their life savings from the beleaguered Northern Rock!’ and so begins the first run on a British bank for 140 years. What a stroke of luck for Barclays - the 91�ȱ� cannot see the wood for the trees and all airtime is now devoted to Northern Rock.

Then to add insult to injury my favourite man, Mervyn King goes before the House of Commons Treasury Select Committee and states that he did not step in before as “it was a "difficult balance" to strike between the need to secure the integrity of the banking system, and avoiding "moral hazard" - where banks believe they can behave irresponsibly because they will always be bailed out.”

Now I don’t know about you but the only banks he could be referring to here are the ones that dabbled in the American Sub Prime Loan Books without understanding the market. But everyone took him to mean Northern Rock but how on earth did Northern Rock act irresponsibly?

There are also a couple more factors that we should note.
1.The same ‘idiot’ investment bankers that thought that they could make a quick buck from the American Sub Prime loan books are now actually making a profit from the ‘Short Selling’ of Northern Rock shares. A situation that they themselves engineered to protect their own backsides!
2. Barclays were at the time involved in negotiations to buy ABN AMBRO and they were in stiff competition to do so - would the story of them being 'bailed out' to the tune of £4 Billion affected these negotiations - I think so.

It is my belief that the 91�ȱ�, FSA and Bank of England have colluded to protect Barclays (one of our oldest and most powerful banking institutions) at the expense of Northern Rock. Someone had to fall on their sword and it was the youngest and least influential of the banking ‘magic circle’ that drew the short straw.

We all know that the 91�ȱ� and the FSA are heavily influenced by the shiny suited, big car and large house investment banking fraternity but until now I was unaware that their influence stretched as far as the Bank of England. This is the real story here.

What we need now is a full public enquiry into the actions and inactions of the 91�ȱ�, the FSA and Bank of England and also into the undue influence of the larger banks on the financial system.

We cannot with all credibility carry on the way we are – the system is being massaged by those who have the most power at the top table and they are being aided and abetted by those that are charged to protect us the general public and with no thought for the consequences for us the general public!

Pesto - me and you in the ring!!!!

Anyone who has ever read Tribunal decisions on appeals against FSA enforcement penalties will know that policy and decision making by the regulator is sometimes flawed

Everyone knows that all politicians are individuals of principle and they will all resign immediately if there is any suggestion of scandal or impropriety

It's often said that HM Treasury haven't got a clue about the impact of their policy making as evidenced by the recent pre budget report tax changes

Business leaders do get it wrong and have been known to implement a flawed business strategy leading to companies going out of business. Some of them even go down with their ship rather than resign as they're not all like politicians (thankfully)

The Bank of England will also make
mistakes even if they don't admit it

And whisper this, journalists do also get things wrong either factually or in the way they present stories. That's why we have the press complaints commission and OFCOM to adjudicate on specific issues

As we all make mistakes the moral of the story is :

Don't invest money that you can't afford to lose if a company share price drops and don't save more than £35000 with any one bank/building society.

Caveat emptor

If the logic expressed in post 115 is correct (i.e. that going to the BoE means that NR is insolvent), then we clearly need to know which other banks operating in the UK have secured such a facility from another central bank, such as the ECB, as they all must be 'insolvent' too.

Oh dear, what a panic that will cause when Robert finds out for us who they are.

And what if -perish the thought- their directors turn out to be even better paid than those at NR- and also do 'dodgy' stuff like use the money markets?- what on earth will we do then? Ban banking altogether? Buy bigger mattresses to stuff our cash into, Go back to a barter economy? What?

peston get a grip of reality you mug

Just a thought...how many detractors of Mr Peston are NR shareholders? The fact remains that NR was a mortgage bank pursuing a high risk lending policy.

In the immediate aftermath of the NR debacle one financial institution who showed some interest in a possible takeover withdrew on the grounds that NR was technically bankrupt!

To all aggrieved NR shareholders...your shares are still grossly overvalued.

So much rumour and fiction portrayed as truth. So many so-called reliable sources who in fact are no better informed than my pub landlord. So many so-called financial and banking experts who actually know less than my aunite's budgie!

That's the real problem. Yes, Robert, you probably did over-sex the story.

But the real danger is people putting out statements of complete nonsense as being the truth, for other gullible people to believe and build on.

Post 111 being a classic! Not only a conspiracy theory gone mad, but factually so inaccurate as to beggar belief! But don't lets let the real facts and the real truth get in the way of a nice little yarn.

Who should we believe?!

Perhaps poster 118 would like to share with us all his method for valuing NR and his resulting figures. Or is this just another example of the pestonesque assertion approach to posting. We will see what John A comes up with and can then take a reasoned view.

Whatever is done is done.

But right now, following a 'review' of its mortgages, NR finds itself saddled with deeply uncompetitive products, which it simply will not be able to sell.

Presumably as a direct result of the 'premium' that the BoE is puuting on the money that it is 'lending' to NR.

Seems to me that NR is dead as an active business and may well end up as one of those 'zombies' like Equitable Life.

Never mind the 'moral hazard', feel the broken bank.

As we all know, journalists are never responsible for the panic they cause, or for the deaths of whistle blowers, soldiers or the people of Iraq. I used to respect the 91�ȱ� news as a responsible and accurate reporter of the news.
I stopped buying newspapers initially because of there biased and factually incorrect reporting and their playing on the fears of the general population at the behest of there proprietor.
Next ITV and SKY news, which are more interested in sensationalism, celebrities and frightening anyone to death if they go anywhere near the NHS rather than reporting news.
Now the 91�ȱ� is joining the list.
Can anyone tell me where you can get news without comment from so-called experts and annalists?

Robert,

don't let the negative posters on here get you down. Remember what Warren Buffet said:

"You’re neither right nor wrong because other people agree with you. You’re right because your facts are right and your reasoning is right—and that’s the only thing that makes you right. And if your facts and reasoning are right, you don’t have to worry about anybody else."

To Chris Nowell

What exactly is inaccurate about post 111?

Yes, exactly what information is incorrect on post 111 ?

Perhaps I can remind poster 123 that it is the failure to lay out all the relevant facts that is the source of much of the criticism. If Robert P had followed the sentiments of Warren Buffet many unhappy posters would be content and many critic silent.

Can John Constable (post 121)tells us anything more about the current rate of mortgage lending by the NR. If he is right then NR is a bind difficult to get out. But if he is wrong then NR is not in a bind and will come through. So which is it?

Re 118, NR was not pursuing a risky lending policy, as even Robert himself has confirmed. It was its funding policy that caused it to have problems when the central bank allowed liquidity to dry up.

It would help if posters here did some simple research before putting foot in mouth, rather than blindly believing anything that gets put in front of them.

My complaint is that you held out on us. You knew the bank was knackered, but you considered staying quiet about it. In fact, you did stay quiet about it! Is that ethical? We need journalists to tell it the way it is, not use delaying tactics to stall and manage information - that's not your job, mate. Just give us the straight dope in future, as soon as you get it. Thanks,

Jacques

I think information of this nature regarding a listed company should be first heard by disclosure through an approved regulated news service such as RNS NOT through journalists.

That is my issue with the matter

I think the facts are clear for everyone to see, digest and make up their own minds over. There has certainly been enough commentary on them.

The issue however remains that both the 91�ȱ� and Mr Peston are paid (with taxpayers money) to report on these facts. Unfortunately it appears you would rather audition for a column in the Sun or News of The World. We have more than enough opinions based on hunches or 'fears' (as Mr Peston admits in his 'Rocks Treasury' blog) in the tabloid media in this country, without the 91�ȱ� moving in the same direction.

It's a question of trust and I for one will struggle to take either Mr Peston or the 91�ȱ�'s reporting at face value in the future.

Should the shadow of redundancy happen to darken Mr Peston's door following the announcement this morning of 2,500 job cuts at the 91�ȱ�, he will be uniquely placed to pause awhile and spare a thought for the 6,500 Northern Rock employees whose door he has similarly darkened.

Mr Peston clearly didn't cause the global liquidity crisis but he did contribute toward and exacerbate a run on the bank. Of course Mr Peston has a right to vehemently uphold our right to free speech and the freedom of the press. No sensible person would dispute that. The point is that he should never have been put in possession of these facts in the first place. Mr Peston may well have acted irresponsibly but his actions are positively saintlike in comparison to the shameful little weasel responsible for originating the leak. Do the honourable thing Mr Peston and name your source.

It will be fascinating when we all find out which is ultimately the larger; the run on the bank, or the borrowing on the BoE facility. I wonder which one the 91�ȱ� will be hoping for?

Should the shadow of redundancy pass Mr Peston by and darken the door of his friends and colleagues at the 91�ȱ�, perhaps they should pause awhile and take the time to tell him exactly how it feels.

Thanks Mr Preston. I am a Northern Rock investor and I now have shares in the company. Carry on the good work mate. I will keep an eye on your reports.

Those who listened to the full recording of the Select Committee's meeeting on Tuesday would have learned that, in early September, NR was still funding itself adequately.

However, because the markets had seized up in an unprecedented way, and therefore no-one could know how long that would last, NR decided as a matter of prudence to set up a facility with the Bank of England. It was just a facility, a back stop, and NR did not intend to take it up.

NR could not have known, and could not have expected , that this arrangement would be leaked, and could certainly not have expected such sensational and indeed gleeful,almost amused, reporting by Mr Peston.

Barclays had already actually borrowed billions from the Bank Of England, without attracting much attention.

Other banks in Europe, with similar business models to NR, had borrowed from the ECB without attracting leaks or comment.

The leaks and comment caused the run, which caused the current problems of NR. It is ironic that, had NR not been prudent, and had just taken the risk that the markets would open again, NR would not be in the present situation.

The leaker and Mr Peston have a lot to answer for - the plight of an efficient, profitable bank with thousands of employees in the UK - a bank which has kept its call centres here in the UK and which has given millions to charities in the North East, is on their consciences.

Here are some of the most salient facts about the NR situation.

Fact 1
The BoE failed to ensure liquidity in the financial markets. Other central banks did. The BoE failed to do its job. The failure of the BoE to ensure liquidity unravelled NR's business model.

Fact 2
The FSA did not warn of the risks associated with NRs business model. It did not fulfill its role. (But then it too probably also expected the BoE would do its job.)

Fact 3
NR did not insure against the failure of the BoE to maintain liquidity. (Its calculation appears to be the same as that of the FSA)

Fact 4
NR is borrowing funds from the government. In other better circumstances it would be borrowing funds from other sources.

Fact ? 5
NR has a large and good quality mortgage book on which it has made good profits. Providing the government has the will it can ensure the NR situation is fully stabilised.

Robert , are any of these facts in dispute ?

Opinion
The 91�ȱ� through Robert Peston have persisted in a style and manner of reporting which has been unbalanced, has wilfully over interpreted, has misled by omission, has been cavalier and sensational in use of language. It has damaged NR.

What are the 91�ȱ� editors doing?. It is just this kind of disregard for giving the fullest facts in a balanced way that makes me and others dispair of the current management of the 91�ȱ�.

Peston, do you have a mortgage ? Was this facility afforded to you by a lender on the understanding that you were to pay it back in the future.

Did this lender therefore bail you out of a crisis, ot would you class the situation as a bit more sensational than that ?

If people want to understand more background/context on how the NR got into the position it did, they could do a lot worse than read the article in this week's Economist.

It details how the problem was spotted years in advance by some and how NR's competitors recognised the danger earlier this year and decided to take action to avoid the increasingly probable credit crunch.

Nowhere in the article does it say that NR is in the current situation due to the 91�ȱ�.

I've no axe to grind, I don't work for/with either organisation and don't have shares in NR. I do know that some people put the "jerk" in knee jerk and without spending half an hour explaining the situation 1 on 1, they were always just going to take their money out.

Nowadays people trust authority figures (and the 91�ȱ�) less - even if the 91�ȱ� had said "there is no risk of NR going bust" (which was not true at the time), there would still have been a run on NR.......

Comment 111 is factually incorrect becuase the facility that Barclays requested was an OVERNIGHT loan, rather than a lender of last resort situation like NR. Robert is therefore entirely correct in reporting these events differently.

However I would be interested for him to look into why Barclays and RBS have requested, and received, exemptions from section 23a of the US Fedral Reserve Act over the last couple of days.

#127 Yes, I can give you a little more information from this weeks Mortgage Adviser magazine (for professional advisers).

NR Fixed and Tracker rates - "the rates are well out of the market e.g a two year fixed rate is available at a rate of 6.59% (fee £1995) compared to a Woolwich two-year fixed at at rate of 5.59% (fee £995)."

Other similar comaparisons were made with trackers.

Conclusion from Mortgage Adviser - "Northern Rocks products just will not sell at all".

I'm sorry but this time it truly is grim oop North.

"...the more they talked the more absurd the argument appeared:

-bob '..he told me to run...I swear..'
-ken "yes sir, but do you have a habit of following what reporters allude to?"
-bob "well, yes, don't you?"
-ken "ah, no sir, I make it my business to make informed decisions. You acted on the whims of a news report"
-bob "But if he didn't say anything I wouldn't have run"
-ken "But you miss the point sir. It's not about the run. It's not about a report causing the run"
-bob "why, Whatever do you mean?"
-ken "The ship was sinking. It had hit an iceberg significantly larger than its models could predict or handle. It was inevitable. There were not enough life boats. The engineers had relentlessly expressed grave concern. But the ships company arrogantly dismissed all, and went back to the party"
-bob "But he shouted Run. It was so real."
-ken "The man who you heard shout 'run' was a reporter doing his job."
-bob "yes, but the way he said it! i thought...."
-ken "thought what sir? that the ship was sinking?
-bob "its not as simple as that. everything would have been ok if he hadn't shouted 'run'. There's always someone trying to rock the boat--so to speak."
-ken "I afraid it is that simple my friend. If it wasn't him, another would have shouted. And at some point you most likely would have shouted 'run' yourself.
-bob "yes, yes, but by shouting 'run' all the people ran to one end of the ship causing it to tilt forward forcing the bow down into the sea and......."

And so it continued, well into the night and again the next morning. This cataclysmic event, caused by the ship's owners' blatant disregard for the life and safety of it's unsuspecting passengers, now overshadowed by a reporter's good sense to shout 'run', and the psychology of crowds. Things would be so much easier if all information & news was censored, then we wouldn't have to make any decisions or be accountable: we could blame
everything on the government.

So children, I hope you have learned a few lessons here:
1/ learn to think for yourself
2/ make your decisions from a position of strength, applying information and derived knowledge.
3/ be responsible for your actions or lack of action
4/ Do not blame others for your own shortcomings. Even if it gives you sweet satisfaction
5/ Remember, he who holds the money holds the power i.e. banks are omnipotent
6/ Never trust a middle aged bald man wearing a trendy suit and a toothy smile with your
money. hey! check your wallet.
7/ the banking industry needs reform to combat these gangsters: right! never going to happen
8/ sometimes the mattress is as good a place as any.

hey...hey...remember; be careful out there"

This is incredible!

I really can't believe some of the remarks here. If this saga ever went to court, and I hope (but doubt) it does, any mention of this reporter making/causing a run would be laughed out. Totally irrelevant. This has been long in the making. If he didn't 'create' the run, it would have happened anyway! It was the only logical progression as the situation worsened. It was just a matter of when. And to say it would not have happened is to demonstrate your ignorance of the events.

The only possible defendants to stand trial here are NR & the government, and possibly other institutions who said nothing as they followed these events long before the crash. It is the actions & inactions of these players that cultivated the environment necessary for a crash.

post 15: using the term 'lender of last resort is not sensationalist in the slightest. Pick up any standard econonomics text book and it will say that one of the main roles of any central bank is that it is in fact the lender of last resort!!! no other bank will lend to it (credit squeeze) and thus it is obliged to go to the central bank (Bank of England) for funds.

THese comments reek of a systemic witch hunt. They play to the ignorance of most investors and attempt to 'rally the masses' behind a premise which shifts the focus away from the real issues.

Preston rocks!

Jimmy Preston we'll never forget you.

Shock , horror, the 91�ȱ� to be carved up. TV centre to be sold, job losses.
All this came about because of Rob Pestons sensationalist writings about Northern Rock (allegedly). Mr Peston and 91�ȱ� directors could go before MPs to explain how they wasted the license payers money. Mr Peston could be fired and to start a new career on local newspaper as junior reporter.
Northern Rock could get huge cash injection and buy out the 91�ȱ�. Not that I would srite anything sensationalist.

As a Northern Rock employee, do I blame you for the situation NR found itself in by 13th September? Absolutely not and I don't think anybody is implying this, despite many of the comments on this board. As (the vile) John McFall and his TSC cronies are finding increasingly frustrating, there is no clear scapegoat to offer up to today's name/blame/shame society.

Two significant circumstances contributed to NR's situation: (1) Banks stopped lending to each other. Crucially for NR, and contrary to advice given at the time, this was a total freeze, REGARDLESS of the quality of assets that would stand as collateral. (2) NR/BoE were legally obliged to make public the facility arranged to provide LOLR credit. Meanwhile, numerous American and European banks (some with more extreme business models than NR) covertly borrowed to cover their needs.

So do I blame you for what happened in the immediate aftermath of 13th September?
YES.
Faced with the above situation, NR will have been aware that the publicising of the BoE facility would unnerve many customers. The tone of their communication, scheduled for Monday 17th, would have to be as re-assuring as possible. Preparations would have to be made over that weekend to fully de-brief staff, arrange additional support, beef up point of contact facilites on both online websites and telephony systems in anticipation of potentially massive withdrawals and account closures. In fact, make it as easy as possible for customers to access their money if they wanted it.

Even with this controlled release, maybe the infamous "run" would have panned out in exactly the same manner. But maybe, just maybe, it could have been reduced to a bank "light jog" or even a bank "brisk walk". The fact is, we will never know.

And the reason we will never know?
Well, this is where the camera turns on you Robert. Yes, you. Armed with leaked information (no chance of finding out who gave you this little titbit by any chance? Thought not!), you weighed up the consequences of what you were doing and made a decision to run the story on the Thursday evening. In doing so, you took away all chance NR had to prepare in a reasonable manner.

"But it was in the public's interest" you cry....knowing the information was to be released anyway, you clearly felt it was important enough to release the story 4 days early and follow it up with some panic inducing TV appearances that evening. What exactly was going to happen to this solvent business in the course of that 4 days that was of such public interest?

Unfortunately, the tone (more so than the context) of your long awaited "scoop" was picked up by the rest of the media circus. In my opinion, you are clearly implicated in the run, the run has battered the NR brand, customer's confidence is in the brand and confidence in banking is everything.

Of course, despite growing critisism, I'm sure your paymasters will take no action and I truly believe we will see pigs shooting up into the air with jet packs on before you would acknowledge any wrongdoing or, dare I even say it, apologise. I suppose the best I can hope for is that you do take some of this on board in your tiny 91�ȱ� Business Editor heart and, if there is a next time, your approach may be slightly different.

PS. All those lovely profile raising TV spots and most people on this board are still calling you PReston!! Makes you wonder whether it's all worthwhile Robert.

Peston doth protest too much, methinks.
You should NEVER defend your reporting of facts, whatever the consequences of that reporting.
Our way of life depends on journalists shining light on what our politicians, business people, regulators are doing, and if they don't like that they should have acted differently.
And while I have your attention, how about less use of slang and drama in your reports (and blogs): let's grow up!

Still debating this issue?! It's getting rather old now, especially the regurgitating of all the "facts" and "figures" and who is or isnt correct...almost degrading to the level of YouTube comments!

Totally agree with #141, #143!

To completely swing the subject...if people put their effort and energy into more important issues just think what we would achieve in this life...

Consider this...what would you all do without the splendid fellow Mr Peston and his blog if he was to be pushed from the 91�ȱ� ranks?! I think this blog brings much enjoyment and happiness to many people judging by such commitment to it!

Have a great weekend!

post141: totally agree.

Some of the posts on here are truly astonishing. To point the finger of blame at a business correspondent as the sole reason for the NR debacle beggars belief.

The bad news regarding NR was well embedded in the financial system before Mr Peston's remarks.

I agree with most of what post 132 says, because of Mr Prestons sensationalism both my wife and daughter who are NR staff are worried about their jobs, i hope that when it comes to your job on the line you dont have to go through what we have.

Robert

For your actions the least you should do is offer an apology to all Northern Rock employees and there families............and a packet of chocolate eclairs each!!!

Mr Peston should be congratulated for explaining this complex issue in a simple manner through the writings in various forums. I think the NR executives should be ashamed of themselves for blaming Mr Peston for their failures. Clearly business decisions are their responsibilities not journalist's.

Noted today that NR have borrowed a further 3 Billion.

This situation is frightening.

I am a fiscal minnow but can use a calculator.

16 billion divided by 60 million = £262,667 for every man, woman and child in the UK.

I can think of quite a few better uses for that ammount and am quite prepared to go before a select committee and prevaricate about my Risk Strategy.

Robert - have a nice weekend.

Human Nature - what you tell people and what people hear you telling them will often get confused. This should be well remembered at this point.

If the Northern Rock communication machine had been left to do its work on 17th, maybe, just maybe the "run" on the bank would not have appeared.

If the Northern Rock communication machine had been left to do its work on 17th, maybe, just maybe the "run" on the bank would STILL have appeared.

People will hear, "Your money is safe...". The rational human being will then make an informed judgement about the interest rate they get on their savings with Bank A, compared with Bank B which is offereing the same deal or better. On Friday 14th or Monday 17th (date is not important) if Bank A is Northern Rock, despite all the reassurances, would you not feel it "prudent" to withdraw your savings and deposit them somewhere perceptibly "safer". It is after all your money and not the banks'.

To paraphrase the mush beleaguered Mr King, "...it would be prudent to do so...". Mr King is in the unfortunate position of having done completely the CORRECT thing. It was and still is a liquidity issue for one isolated Bank - not a solvency issue for it. Liquidity issues at Northern Rock would not threaten the stability of the wider Banking sector, so by the Bank's own rules why should it pump money into the economy to help out one bank with an issue. Especially given that the bank had the issue as it ignored the risks to its business model (not a risky business model) by a possible credit crunch - the first whispers of which we heard back in April/May time.

Can Mr Peston surely have such power over the fortunes on one Bank? If so, should said Bank not hire him to do some positive work for them during these difficult times? Especially given the super-human economy altering powers he is so freely endowed with throughout these responses!

Whether his style of reporting on that day can be called sensational or not is also up for discussion. I did not personally find it so but as I mentioned right at the beginning of this post - what you say to people and what they choose to hear can be very different.

Ask yourselves one question. If the report had been officially made on 17th, the Northern Rock way, with all their additional staff in branches and on telephones to help, given that there would still have been queues outside branches and jammed telephone lines...which scapegoat would people look to pin the tail on then?

Regarding Post 151 this is not a laughing matter, sarcasim is the lowest form of wit. How would you cope with the threat of two of your family members being out of work?

I think it was Jack Nicholson in "A few good men" who coined the idea that he was somehow protecting the great unwashed because they could not handle the truth. Well as I understand it Journalists have a duty to pursue the truth no matter how unpalatable it may prove. Where was the FSA when Northern Rock was aggressively expanding its mortgage book using short term borrowing in the inter bank market to cover 25 year commitments? The last thing Mother Brown wants is the public to start asking awkward questions about the FSA. Never forget the FSA is Mother Brown's baby which accompanied the so called granting of independence to the Old Lady. Trying to pin the blame for the current shambles on Robert Peston is oh so New Labour but it is not going to wash because the public are not fools. A management failure is a management failure and today we say cheerio to the Chairman of the Rock. Those of you who think that the shares are a good punt may be right but you are flying in the face of the facts. Whoever manages to take the Rock from the Treasury will demand a price that could leave shareholders very diluted indeed. Don't believe me, well read the smallprint of the so called Virgin approach. This saga has legs as they say but no doubt Mother Brown will be joining in the knees up in Paris tomorrow and another week is behind us. Keep this one on the boil Robert, no need to apologise for airing the facts.

To post 156

I am actually a employee of NR myself. I am just trying to lighten the mood as numerous members of staff are using the blog.

Keep your chin though

Amongst all the sound and fury, it is sometimes hard for people to step back and calmly determine who was at fault here.

Some commentators, notably Anatole Kaletsky in The Times, pinned the ultimate blame firmly on Gordon Brown.

Because it was Brown who set up the tri-partite sharing of oversight and responsibility between the BoE, FSA and Treasury.

Brown apparently trumpted this 'success' down the last decade but now that it has actually been found wanting, Brown is silent.

I suppose that is why we English generally loathe politicians.

That is, they proclaim their (few) successes and ignore their (many) failures.

That might be 'good politics' but it is not very honourable.

Re 157, the average actual life of a mortgage in the UK is something like 6 or 7 years, perhaps even shorter. It is certainly not 25 years, because people generally move house or remortgage long before the 25 years is up.

Perversely, wholesale and interbank funding generally has a much longer average tie-in than retail funding, much of which is effectively instant access.

All mortgage lenders are therefore dependent on market sentiment to enable them to continue to have sufficient liquidity to service their business, and those with lower levels of wholesale funding are arguably at even greater risk of their liquidity running out in the event of a turn in sentiment.

I don't think it is correct to simply assume that a predominantly retail funding model is better than a predominantly wholesale funding model. They can both go very wrong in adverse market conditions.

I think that post 153 means £262.667 per person and not £262,667 per person. I nearly had a heart attack when I saw the figure he wrote.

The criticism of your story is completely unfounded. It is Northern Rock's fault that there was a run on its own branches, not yours. You reported the story accurately; the fault lies with Northern Rock's business model, not your journalism.

If there was ever an example of shooting the messenger then this is it!

Many thanks to clarification!!!

Maybe I am giving my age away but when I received my education a milliard was (10 to the power of 9) and a billion (10 to the power of 12).

My apologies!!!

At least I have learned something from this blog and the comments.

You have nothing to answer for but Northern Rock has. What would have happened had the guarantee not been put in place ? You have done the public a service in the best traditions of the 91�ȱ�. You may well have also done a service for Irish savers. Irish credit unions had well over €100m on deposit with Northern Rock and during the run there were many who held their breadth that this nugget of information wouldn't get out. It didn't, but what it did do was focus peoples minds on the complete absence of any state supports, interventions or compensation mechanisms for millions of Irish savers with credit unions. I suspect that quite apart from Irush authorities looking at the Irish banks deposit guarantee scheme they will also be exercising their minds on what must now be done for credit union savers here. I also suspect that HM Treasury will be anxious to ensure adequate cover for savers in Northern Ireland whose credit unions are not covered under the FSCS.

The idea that Northern Rock's management is not wholely responsible for the mess is crazy.

a) If you cannot meet your liabilities, it is not a "liquidity problem" you are insolvent.

b) LTCM also had a "liquidity" crisis and no one was claiming that that firm had brilliant management or that is was the press's fault for reporting the news.

c) The fact is that without Darling's generosity with other people's money, Northern Rock would be in liquidation and people would have lost their money on a sliding scale above 2000GBP. Would you have been patting Mr Preston on the back for not reporting that their was issues with NR? I will bet you'd have been making comments about "insiders" selling shares and exiting NR whilst the retail customer got screwed. In case you think this is a result of Mr Preston's report, the short interest in NR was 15% at the end of July - long before the report - as opposed to a sector average of 3%. Sound like a company with a "excellent business model".

NR's management were incompetent and lucked out for a while and the probablities caught up with them as they do with all people who are lucky not smart.

A series of stories lambasted Adam Applegarth for selling £2.6m of shares at peak prices and attacked his extravagant lifestyle, alleging he used the money to buy a Northumberland Country Estate mansion, luxury cars, which include an Aston Martin for himself and a Ferrari for his wife.

WHY would a guy at the top of his short career of 6 years do something like selling his shares when in his eyes, or not, as the case may be the Northern Rock was on it's way up NOT down particularly with the collapse of the Rock's share value following so close on the heels of this exremely fortunate and timely share dealing.

And let us not forget - The Fact that the 46 year old father of two has taken almost £10m in pay and bonuses in the last five years to maintain his lavish, extravagant lifestyle.

Maybe Mr Applegarth should be made to refund some of his ill gained wealth, when he is at the root of the Northern Rocks demise, with his ill thought out policies and decisions which stand to cost us all dearly !!!

Surely an investigation into the possibility of insider dealing should be on the cards.

Sadly I seem to be one of the few who have sympathy with shareholders, a considerable number of whom aren't millionnaires that can afford to lose thousands. I feel sorry for any law-abiding citizen who loses money. What about original depositors of the Rock when it was a mutual, they were part owners and got shares when it went public. Many hung onto those shares with the view that it would perhaps contribute toards a daughters wedding, or a child's university education. The only fault is perhaps not constantly reading financial news articles as they thought that being a bank the shares would be OK.

As for the clamour that the tax payer shouldn't prop up a private business, well it happens all the time. Business grants for example, then what about the millions given to farmers via the EU (and UK contributions) they are private businessess too. These happen because the Govt thinks the long term gain will be greater. Businesses succeed, pay more corporation tax, employ more people who will pay tax etc. If the Rock is supported enough to continue it will recover, the treasury loan will be paid back (plus interest lets not forget) and for years to come will be paying millions in corporation tax, the employees will be paying plenty in income tax. This must be too logical a scenario, or is it that it's too long-term?

As for breaking EU rules, well what are they going to do? The French do it plenty i.e beef imports so that shouldn't stop us looking after ourselves.