Darling must pay the ultimate price for Northern Rock fiasco

Northern Rock, Britain’s embattled mortgage lender, was forced to seek emergency funding from the Bank of England on 13 September 2007.

Northern Rock, Britain’s embattled mortgage lender, was forced to seek emergency funding from the Bank of England on 13 September 2007. That should have been the first step to its rescue or closure; but four months later, things have gone from bad to worse. Rarely has a financial crisis been so incompetently handled by all concerned.

What should have been resolved behind closed doors with one of Britain’s major clearing banks, at limited or no cost to the taxpayer, has turned into the worst economic and financial debacle since Britain’s misguided membership of the European exchange rate mechanism (ERM) in the early 1990s. The only reason the fiasco is moving to any kind of conclusion is a deadline imposed by Brussels, which is rightly concerned about the vast amounts of state aid involved; the British government has dithered, contradicted itself and taken the wrong decision time and again since the debacle began.

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