Northern Rock free to go rogue again

I am pretty dismayed by the government’s decision to sell Northern Rock to Virgin Money, because it means that the UK has missed a perfect opportunity to get a little more diversity into the financial services market.

Since the start of the credit crunch, co-operatives have grown by 21% whilst the UK economy as a whole has stagnated. But the banking sector has changed very little. In the long term, we are promised reforms to create degrees of internal separation. But the immediate policy of requiring high capital ratios has been a permission slip for banks to fleece their customers and is anyway, harder for mutuals who build capital slowly over time from members and retained earnings rather than external shareholders.

Good luck to Virgin Money, but the risk is that Northern Rock and the other PLC banks are simply free to go rogue again.

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3 thoughts on “Northern Rock free to go rogue again

  1. Yes, quite. It also seems strange that the government was able to buy a bank on its knees, return half of it to health, then sell it at a massive loss. Weren’t we told originally that these bailouts and nationalisations would deliver value for money, in the long-run?

  2. Just (literally) found out about Bank Transfer Day in the US. Reportedly 650,000 people transferred to local banks & credit unions and away from the traditional banks (amongst which it seems we must still include Northern Rock, a once proud and innovative Building Society) in the last month and now a follow on campaign – balance transfer day I believe – is seeking to get charities and other community organisations to move their money from the usual suspects to local banks and credit unions. Maybe it’s time we did something similar in the UK? We’ve got the sector for it after all… http://redgreenandblue.org/2011/11/04/bye-bye-banks-650000-switched-to-credit-unions-last-month/

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