Friday, November 16, 2007

Northern Rock bosses sacked

You bet your company on the international money markets and lose, creating the first run on a British bank for 158 years and are only saved from bankruptcy by government intervention and they still leave you in charge, until now that is. Finally, someone has figured out that the Northern Rock fiasco was down to bad catastrophic management and the guilty parties have been shown the door. Except not yet. Apparently, Adam Applegarth, the CEO, is being kept on until January as an 'advisor'. Is this so he can go to the firm's Christmas party? This chap has caused over £20 billion of taxpayers money to be tied up in his little business scheme and there is a real prospect that some of that may be lost. Every taxpayer in the UK has effectively invested in Northern Rock because we have a financial regulatory system that failed and a government without the bottle to let a bank fail when it richly deserved to do so, but in the final analysis the blame lies with Applegarth and his cronies on the Northern Rock board. They should have been sacked sooner, and the way that this is being handled does not auger well for the takeover bids and rescue plans that are now jostling for attention because the now ex-management appear to have done little to stop the value draining out of what was left of their business. In the end it will be shareholders, staff and taxpayers who will suffer for that.

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