You say buck stops with Northern Rock directors

Sep 15 2008 By Andrew Mernin

READERS of The Journal say Northern Rock’s former bosses were the prime architects of the bank’s downfall a year ago – but have also hit out at the Government’s handling of the crisis.

In a survey on our business website – www.nebusiness.co.uk – almost 75% of respondents said the Government should have stepped in earlier to help Northern Rock before eventually nationalising the lender.

Meanwhile, more than 70% rated the Government’s overall handling of the situation as either poor or very poor with ‘indecisiveness’ being cited as one of the main criticisms of ministers.

But the majority believe that the buck must stop with the company’s former management team when it comes to apportioning blame. Just over 56% of those who took part blamed poor judgment by the bank’s management and board for failing to avert the corporate disaster.

Around a third of voters also heaped blame on the Financial Services Authority for not being more vigilant in monitoring the performance of the Rock.

Almost 60% of people believe nationalising Northern Rock was the wrong decision, with 63.1% saying it was unfair that taxpayers’ money was used to underpin the bank when it plunged into difficulty.

On a positive note, readers remained relatively optimistic over the future of the bank.

Over 60% of people believe the Rock brand is strong enough to recover from the crisis and return to its former glory. Almost two thirds predicted that the lender would still be in operation in five years’ time, although they conceded that it will be on a much smaller scale after the current restructuring.

Other key findings of the survey were:

54.8% of respondents said the safeguarding of jobs at Northern Rock should not be the main priority for executive chairman Ron Sandler.

56.8% of people agreed that the Rock’s growth strategy before last year’s crisis meant it was always going to be vulnerable to a prolonged drop in house prices regardless of the credit crunch.

Only 19.4% of voters thought the Rock would be de-nationalised within the next five years with only 7.5% believing that the bank could recover to its former size by 2013.

PAGE TWO: Your views on the Northern Rock crisis.