Leading mortgage brokers say Northern Rock’s management must take responsibility for the narrowness of its funding policy and for failing to have a disaster recovery plan.
At the round table debate, Robert Sterling managing director Kevin Duffy said the firm must take responsibility for its problems, noting this warning comes from the intermediary market where Northern Rock has been one of its best friends in terms of solving affordability.
John Charcol senior technical manager Ray Boulger added: “I think the main criticism you could level against Northern Rock is they did not have a disaster recovery plan.”
Duffy said: “The question should be asked as in the same way that we encourage all our customers to buy insurance policies from us. Lenders should also be insuring themselves for any sort of eventuality.”
Boulger also criticised Northern Rock chief executive Adam Applegarth for a memo he sent to staff after the news the Government would be guaranteeing all deposits, which he signed off “Bloody hurrah”.
He said: “I think he really demeaned his position by doing that and his job is going to have to be questioned.”
Duffy said there is no doubt that the Government and, to some extent, the FSA have a case to answer for and blood on their hands, with shareholders having lost fortunes.
He added: “It also brings into sharp focus this whole matter of the independence of the Bank of England. They are probably asking themselves today, are we an independent body or are we just independent when it suits the Government?”