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.