What happened at Northern Rock?

Vince Cable MP gives us his back-to-basics, nutshell, idiots guide to how Northern Rock bank came undone; what the government did; and what happens next. Listen and win.

Category:

News & Politics

Tags:

• Vince
• Cable
• Nothern
• Rock
• Business
• news;
• Bank;
• overview

[amani89b]

thanx for this vid, i'm currently doing my a-level business studies exams, this is really useful- could help me to get marks for application of real life situations!

[herecomesthebosscom]

That's great to hear. Thanks.

Any topics or stories you want us to explore, just let us know and we'll get on it.

If you want to be involved that's cool too - always looking for interviewers etc.

[TheDottybotty]

were to become more apparent to the public over the years, but the first sign of the flawed logic and what was to come, if you were looking for it, was evident in that very first early attack on the savings.

In the end, the ultimate analysis of what lay behind this thinking was just termed "greed", but nobody has ever adequately explained why the main strategists of the decision - who have been noted for aspiring to modest lifestyles and lack of flash (unlike most aspiring bankers who are

[TheDottybotty]

I thought someone would say something at the time,particularly since it was so out of character with the ethos of NR's background, but the attitude was The Management knew so much better, they had spoken, & nobody said a word. Emboldened by this coup, over the years, they pushed it to giving family & friends 125% mortages, tipping off carpet-bagging relatives when they were going to float, giving loans to the unemployed, and so on. The extremes of the recklessness

[TheDottybotty]

The "Big New Idea" was that 'time was money', and staff- time could be better spent, it was said, trying to flog loans and mortgages to all and sundry .

Now i didnt know much about banking at the time, but I knew that if the success has been based on the slow accretion of the deposit accounts and has always worked so far, you stick with the tried and the true.

[TheDottybotty]

discouraged by letting long queues lapse & showing a lack of enthusiasm for talk of their investments- if they got annoyed and said they would take their business elsewhere, there was almost a sigh of relief- but not before the staff were instructed to try to flog the ex-customer a loan before he got out of the door. Commission was given to staff on completion of loan applications, and "sell, sell, sell".

[TheDottybotty]

in record amount of time for their liking- despite the deposit accounts in the past having always been the foundation for the building society's success & expansion. Behind the scenes, no new investment products were going to be introduced, and inquiries of the same were to be discouraged. Their was a casual air that customers' who came in to 'waste time' by the futility of depositing on one day & withdrawing on the bext "piffling amounts of money" could be casually

[TheDottybotty]

Maybe i shouldnt say something because of "the Data protectionAct", but the idea that the Top Brass of Northern Rock cared about the depositors, is pretty wide of the mark. It wasnt just a general contempt, it was actual policy.

In the mid-90s, David Baker came to the City and sent many memos from the board actually instructing branch staff not to sweat the investment side of things cos it was going to be wound down anyway .

The attitude was the deposit accounts werent making enough money

[lookatcha]

good vid

[stuartwwillis]

@kjkjkijkijk read the turner review! its good on this

[3wrongnotes]

its months ago since you typed this but there is a statistics section above comments and the year published and month is on the right. address is in the address bar