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Where is Northern Rock’s knight in shining armour?

What a week it has been for the mortgage world. The events which have been played out over the last seven days with Northern Rock could have been lifted directly from a film plot (although perhaps not a film that many people would exactly rush to see…)

The biggest run on a UK bank that many have ever seen has created a whole host of villains but there has yet to be a good solid hero to emerge from the rubble.

From Bank of England governor Mervyn King to Chancellor Alistair Darling to the FSA and to Northern Rock’s chief executive Adam Applegarth – all have been cast at one point or another as the villain of the piece.

People have questioned King’s tough love attitude and whether it was really the right stance to take, particularly after his recent u-turn by injecting £10bn into the money markets this week.

Applegarth’s media forays over the last week has also not helped him escape his villain role. Many do not feel he has helped calm the public’s panic which has seen masses of his bank’s customers queue for hours – and often from horrendous early hours of the morning – in order to take their life savings out of Northern Rock in those first three dark days of the bank’s crisis.

Despite the Government attempting to become the hero of the Northern Rock story, by making a hurried last-minute pledge on Monday night to guarantee all deposits held by Northern Rock, the Treasury has faced criticism that it did not act earlier.

So where exactly have Northern Rock’s heroes been hiding? Will a hero come in the form of a rival willing to snap up the bank and help put it back on the path to recovery? The industry will have to wait and see as there will clearly be a lot more developments to come on this story.

There are still a lot of questions to be answered. What exactly happened in those early days at the beginning of August when it was first realised that Northern Rock had a big problem looming?

What role did the FSA and the Treasury really play in it? How independent actually is the Bank of England? Does new regulation need to be introduced in order to stop a similar crisis happening in the future? Can Northern Rock recover after its brand has been so contaminated by the saga?

The Treasury select committee will be trying to get to the bottom of these questions in the coming weeks.

It has already grilled King this week, which saw the governor defend his decisions and lay the blame on existing legislation for how the events unwound.

For more views on the Northern Rock debacle and the current market situation following the fallout from the US sub-prime crisis make sure you pick up a copy of next week’s Money Marketing.

We gathered a whole host of mortgage brokers together for a roundtable in order to discuss what exactly is going on in the market which will be covered extensively in next week’s issue.

Their views make for very interesting reading so stay tuned.


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