Category Archives: Northern Rock

The taxpayers’ misery – and the government’s discomfort – have now begun. The nationalisation of Northern Rock will be costly to taxpayers and damaging to the government’s reputation. Last night the government brushed aside Conservative proposals to handle Northern Rock in a different way and to avoid the taxpayer taking on responsibility for all the [...]

It is good news that the Bank of England is thinking about its role in modern markets, and that the US and UK authorities are to review how to handle banking liquidity and regulation in future. This agenda should include: 1. Have the Basel regulatory arrangements encouraged too much off balance sheet lending? 2. How [...]

I am glad to see the Telegraph today giving front page prominence to the rise in mortgage rates this week. See yesterday’s blog on interest rates and the MPC for the background.

This morning the FSA takes the regulatory blame for Northern Rock and admits it made mistakes. I think it is a case of mistaken identity. It was the Chancellor and the Bank of England that presided over the collapse of Northern Rock, not the FSA. Remember what happened. In the summer of 2007 money markets [...]

There has been a lot of comment on the state of the economy, the Credit crunch and the banking problems over the week-end. It is time to re-examine the views of this blog, and the responses from many of you. I have argued: 1. The US and the UK will avoid recession but will experience [...]

Today the Regulators start their search for the bear raiders who spread false rumours yesterday. Meanwhile, the Bank of England should repeat that as the apex of our large and strong banking system, it will make enough liquidity available on a continuing basis so the markets function better and bear raiders have less chance to [...]

The oddest thing about this slowdown and credit crunch is the delayed reaction – or the lack of reaction – of the UK housing market. Shares have slumped. Commercial property prices have fallen substantially. Retailers have complained about the squeeze on their customers. Yet house prices are still slightly up on a year ago, and [...]

A quick haggle, a visit to the lawyers, and a bank is bought and rescued over a week-end in New York. That’s the way to do it. It makes the UK’s attempted private sector rescue of Northern Rock look ham fisted, long winded and ultimately unsuccessful in comparison. The US authorities have once again acted [...]

The budget looked insignificant and irrelevant the day it was announced. It looks absurd this morning. The near collapse of the 5th largest investment bank in the US and the rapid action taken by the US authorities to avert a crash in the wider mortgage and banking markets matters to us as well as to [...]

Inflation is too much money chasing too few goods. Today inflation in the UK and the US is being driven higher by increases in the prices of energy, raw materials and basic foodstuffs, and in the UK by the costs of government. Much of the international inflation comes from excess liquidity in the oil exporting [...]