The Journal is reporting today that Northern Rock will meet campaigners who have expressed concern about its “aggressive” repossession policy, Treasury Minister Yvette Cooper told MPs yesterday.
She said the state-owned bank would be meeting with some of the charities which had raised concerns, adding that the bank had particular issues about its Together mortgages, which were effectively for more than 100% of the value of properties.
But Ms Cooper stressed it was right that the lender was run at arms length and on a commercial basis after Northern Rock was criticised by housing charity Shelter for an aggressive repossession policy.
She said: “I actually think it is right that all lenders, not simply the lenders that got support from the recapitalisation scheme, should do everything they can to make repossessions properly a last resort and not a first resort.
“And that is why we have introduced new court rules in order to strengthen the procedures to ensure that borrowers who get into difficulties can be offered other alternatives and other support as well.”
That could mean repayment holidays or looking at different mortgage rescue schemes, backed by extra Government funding.
Tory spokesman Mark Hoban told Ms Cooper: “Last week you said you wanted repossessions to be a lot rarer.
“Yet despite reassurances last year about the quality of its mortgage book, Northern Rock is repossessing more homes than any other lender.
“Are you saying those reassurances you gave last year are wrong or are your demands just hot air?”
A Northern Rock spokeswoman said: “We do intend to meet up with a number of different organisations to discuss a number of different issues including our repossession policy.”
Friday 31 October 2008
Wednesday 29 October 2008
How to find out about Northern Rock in Parliament?
The public can find out about what's happening about Northern Rock in Parliament by clicking here. This will list all publications, speeches and reports, etc, published on the Parliament website.
Being from politicians it can be a trying read but is a good look at the goings with the powers that be.
Being from politicians it can be a trying read but is a good look at the goings with the powers that be.
Wednesday 22 October 2008
Treasury statement: financial support to the banking industry - 8th October
HM Treasury made the following statement to the House of Commons on 8th Oct.
After consultation with the Bank of England and the Financial Services Authority, the Government announces that it is bringing forward specific and comprehensive measures to ensure the stability of the financial system and to protect ordinary savers, depositors, businesses and borrowers.
In summary the proposals announced today are intended to:
* Provide sufficient liquidity in the short term;
* Make available new capital to UK banks and building societies to strengthen their resources permitting them to restructure their finances, while maintaining their support for the real economy; and
* Ensure that the banking system has the funds necessary to maintain lending in the medium term.
In these extraordinary market conditions, the Bank of England will take all actions necessary to ensure that the banking system has access to sufficient liquidity. In its provision of short term liquidity the Bank will extend and widen its facilities in whatever way is necessary to ensure the stability of the system. At least £200 billion will be made available to banks under the Special Liquidity Scheme. Until markets stabilise, the Bank will continue to conduct auctions to lend sterling for three months, and also US dollars for one week, against extended collateral. It will review the size and frequency of those operations as necessary. Bank debt that is guaranteed under the Government's guarantee scheme will be eligible in all of the Bank's extended-collateral operations. The Bank next week will bring forward its plans for a permanent regime underpinning banking system liquidity, including a Discount Window facility.
In addition the Government is establishing a facility, which will make available Tier 1 capital in appropriate form (expected to be preference shares or PIBS) to “eligible institutions”. Eligible institutions are UK incorporated banks (including UK subsidiaries of foreign institutions) which have a substantial business in the UK and building societies. However applications are invited for inclusion as an eligible institution from any other UK incorporated bank (including UK subsidiaries of foreign institutions). In reviewing these applications the Government will give due regard to an institution’s role in the UK banking system and the overall economy.
Following discussions convened by HM Treasury, the following major UK banks and the largest building society have confirmed their participation in a Government-supported recapitalisation scheme. These institutions comprise:
* Abbey
* Barclays
* HBOS
* HSBC Bank plc
* Lloyds TSB
* Nationwide Building Society
* Royal Bank of Scotland
* Standard Chartered
These institutions have committed to the Government that they will increase their total Tier 1 capital by £25bn. This is an aggregate increase and individual increases will vary from institution to institution. In order to facilitate this process the Government is making available £25bn to be drawn on by these institutions if desired to assist in this process as preference share capital or PIBS and is also willing to assist in the raising of ordinary equity if requested to do so. The above institutions have committed to the Government that this will be concluded by the end of the year.
In addition to this, the Government stands ready to provide an incremental minimum of £25bn of further support for all eligible institutions, in the form of preference shares, PIBS or, at the request of an eligible institution, as assistance to an ordinary equity fund-raising.
The amount to be issued per institution will be finalised following detailed discussions. If the Government is to provide the capital, the issue will carry terms and conditions that appropriately reflect the financial commitment being made by the taxpayer. In reaching agreement on capital investment the Government will need to take into account dividend policies and executive compensation practices and will require a full commitment to support lending to small businesses and home buyers.
The Government will take decisive action to reopen the market for medium term funding for eligible institutions that raise appropriate amounts of Tier 1 capital.
Specifically the Government will make available to eligible institutions for an interim period as agreed and on appropriate commercial terms, a Government guarantee of new short and medium term debt issuance to assist in refinancing maturing, wholesale funding obligations as they fall due. Subject to further discussion with eligible institutions, the proposal envisages the issue of senior unsecured debt instruments of varying terms of up to 36 months, in any of sterling, US dollars or Euros. The current expectation is that the guarantee would be issued out of a specifically designated Government-backed English incorporated company. The Government expects the take-up of the guarantee to be of the order of £250bn, and will keep this under review alongside ongoing monitoring of capital positions and lending volumes.
To qualify for this support the relevant institution must raise Tier 1 capital by the amount and in the form the Government considers appropriate whether by Government subscription or from other sources. It is being made available immediately to the eight institutions named above in recognition of their commitment to strengthen their aggregate capital position.
The Government has informed the European Commission of these proposals and is actively talking to other countries about extending these proposals and has committed to work together with them to strengthen the international system.
The Government is moving ahead immediately with the internationally agreed proposal for colleges of supervision and other measures to improve supervision of the system. At discussions with the major economies at the G7 meeting this Friday, the Government hopes to secure agreement on the need for a meeting at heads of Government level.
After consultation with the Bank of England and the Financial Services Authority, the Government announces that it is bringing forward specific and comprehensive measures to ensure the stability of the financial system and to protect ordinary savers, depositors, businesses and borrowers.
In summary the proposals announced today are intended to:
* Provide sufficient liquidity in the short term;
* Make available new capital to UK banks and building societies to strengthen their resources permitting them to restructure their finances, while maintaining their support for the real economy; and
* Ensure that the banking system has the funds necessary to maintain lending in the medium term.
In these extraordinary market conditions, the Bank of England will take all actions necessary to ensure that the banking system has access to sufficient liquidity. In its provision of short term liquidity the Bank will extend and widen its facilities in whatever way is necessary to ensure the stability of the system. At least £200 billion will be made available to banks under the Special Liquidity Scheme. Until markets stabilise, the Bank will continue to conduct auctions to lend sterling for three months, and also US dollars for one week, against extended collateral. It will review the size and frequency of those operations as necessary. Bank debt that is guaranteed under the Government's guarantee scheme will be eligible in all of the Bank's extended-collateral operations. The Bank next week will bring forward its plans for a permanent regime underpinning banking system liquidity, including a Discount Window facility.
In addition the Government is establishing a facility, which will make available Tier 1 capital in appropriate form (expected to be preference shares or PIBS) to “eligible institutions”. Eligible institutions are UK incorporated banks (including UK subsidiaries of foreign institutions) which have a substantial business in the UK and building societies. However applications are invited for inclusion as an eligible institution from any other UK incorporated bank (including UK subsidiaries of foreign institutions). In reviewing these applications the Government will give due regard to an institution’s role in the UK banking system and the overall economy.
Following discussions convened by HM Treasury, the following major UK banks and the largest building society have confirmed their participation in a Government-supported recapitalisation scheme. These institutions comprise:
* Abbey
* Barclays
* HBOS
* HSBC Bank plc
* Lloyds TSB
* Nationwide Building Society
* Royal Bank of Scotland
* Standard Chartered
These institutions have committed to the Government that they will increase their total Tier 1 capital by £25bn. This is an aggregate increase and individual increases will vary from institution to institution. In order to facilitate this process the Government is making available £25bn to be drawn on by these institutions if desired to assist in this process as preference share capital or PIBS and is also willing to assist in the raising of ordinary equity if requested to do so. The above institutions have committed to the Government that this will be concluded by the end of the year.
In addition to this, the Government stands ready to provide an incremental minimum of £25bn of further support for all eligible institutions, in the form of preference shares, PIBS or, at the request of an eligible institution, as assistance to an ordinary equity fund-raising.
The amount to be issued per institution will be finalised following detailed discussions. If the Government is to provide the capital, the issue will carry terms and conditions that appropriately reflect the financial commitment being made by the taxpayer. In reaching agreement on capital investment the Government will need to take into account dividend policies and executive compensation practices and will require a full commitment to support lending to small businesses and home buyers.
The Government will take decisive action to reopen the market for medium term funding for eligible institutions that raise appropriate amounts of Tier 1 capital.
Specifically the Government will make available to eligible institutions for an interim period as agreed and on appropriate commercial terms, a Government guarantee of new short and medium term debt issuance to assist in refinancing maturing, wholesale funding obligations as they fall due. Subject to further discussion with eligible institutions, the proposal envisages the issue of senior unsecured debt instruments of varying terms of up to 36 months, in any of sterling, US dollars or Euros. The current expectation is that the guarantee would be issued out of a specifically designated Government-backed English incorporated company. The Government expects the take-up of the guarantee to be of the order of £250bn, and will keep this under review alongside ongoing monitoring of capital positions and lending volumes.
To qualify for this support the relevant institution must raise Tier 1 capital by the amount and in the form the Government considers appropriate whether by Government subscription or from other sources. It is being made available immediately to the eight institutions named above in recognition of their commitment to strengthen their aggregate capital position.
The Government has informed the European Commission of these proposals and is actively talking to other countries about extending these proposals and has committed to work together with them to strengthen the international system.
The Government is moving ahead immediately with the internationally agreed proposal for colleges of supervision and other measures to improve supervision of the system. At discussions with the major economies at the G7 meeting this Friday, the Government hopes to secure agreement on the need for a meeting at heads of Government level.
Northern Rock Shareholders Action Group - Update No. 45
Company Recovery Ahead of Plan
Among all the welter of bad financial news recently, one announcement by Alistair Darling almost escaped the limelight. This was the information that Northern Rock had now repaid more than half of the £27bn it had borrowed from the Bank of England, and had continued to repay the loan ahead of schedule. This is despite the fact that the housing market is definitely in a much worse state than anticipated when those loans were taken out, but how much the movement of retail deposits back to Northern Rock has been encouraged by the unlimited Government guarantee is not known. However, it reinforces the views of many Northern Rock shareholders when the company was in crisis that it only needed temporary financial assistance to survive and that nationalistion was not necessary.
No Action Against the Former Directors
More details of the company's financial recovery were given in a "Quarter 3 Trading Statement" which is available on the Northern Rock web site. In there is a statement that following an investigation by the company's lawyers they had concluded that "there are insufficient grounds to proceed with any legal action for negligence against the former Directors, and [the board] has no intention of bringing such action."
Of course we did tell you some time ago that there were unlikely to be grounds for such action and that any such investigation was more "hot air" than based on any real hope of identifying grounds for such action.
Government Support for the Banking Sector
On the 8th October the Government announced wider support for the banking sector including about £500bn of total funding under the Special Liquidity Scheme and the willingness to subscribe for both preference shares and equity. UKSA issued a press release which included the following comments: "The provision of up to £200bn under the Special Liquidity Scheme is also welcomed as a short term measure to improve liquidity in the banking system. This and the other measures reinforces the point we have made before concerning Northern Rock that this company was not a special case but was simply one of the first victims of this general crisis in the banking sector. If similar measures based on a private sector solution had been applied to helping Northern Rock instead of the nationalisation that took place, the Government would not now be facing so many disgruntled shareholders and a legal action".
Note though that after the details of the Government support were announced by the companies, shareholders were astonished to discover that it seemed the Government was intent on making large profits at the expense of shareholders. Also it was "nationalisation by stealth" in the case of Royal Bank of Scotland and LloydsTSB as in both cases the Government will probably end up with effective control. Shareholders will also suffer because dividends will be non-existent for some time and profits in the companies eroded by high Government charges on the preferred shares being offered. We issued a press release which spelled out our concerns and it is present HERE.
Press Comment
An article in the Independent by Jeremy Warner on the 7th October included these comments: "Similar policy mistakes were made in Britain over the collapse of Northern Rock. Rather than support the bank with the liquidity it needed, or provide the government guarantees that would have enabled a smooth takeover, Northern Rock was demonised as a bad bank whose reckless expansion deserved to meet its nemesis in nationalisation without compensation. As events have proved, Northern Rock was, in fact, only the outrider for a funding problem that would become common to the banking system as a whole."
The media, and the general public, are now coming to realise that Northern Rock was not a bad bank but one simply suffering from the same problems that all banks have been experiencing. If the steps now being taken had been applied to Northern Rock at an early stage, then the company could have got through it's difficulties relatively easily, and the lack of confidence those difficulties instilled in the whole banking sector could have been avoided.
Reminder re Meeting for Shareholders in London
The UK Shareholders Association regularly exhibits at the World Money Show in London. This is the premier event for stock market investors in the UK. This year we are in addition holding an open meeting for Northern Rock shareholders thanks to the generous support of the organisers, and have also decided that as we have a full two hours available we will also cover Bradford & Bingley in the last hour (many of the issues are similar and some shareholders had the misfortune to hold shares in both companies). Incidentally we do now have a separate "Shareholder Action Group" for B&B shareholders so let us know if you want to go on the contact list for that also.
The World Money Show is at the Queen Elizabeth II Conference Centre on the 14-15 November 2008 and the meeting we are holding for shareholders runs from 10.00 am to 12.00 am on Saturday the 15th in the Thames Room on the 1st floor. Note that Admission to the Meeting for Shareholders and to the event in general is free but you do need to register. To register Online, visit The World Money Show London Web site today HERE.
If you cannot make the shareholder meeting, we will have a stand in the Exhibition hall and you are welcome to come and have a chat on any of the two days that the venue is open.
Campaign Status
We now have about 38,000 registered supporters for this campaign and the numbers continue to rise. It is surprising how many people who held their shares in nominee accounts have only just found out about our campaign.
Please note that with that number of supporters it can prove difficult for us to answer individual questions from supporters, so please excuse any brevity in our responses.
Fund raising is also going reasonably well although we must again ask those who have not yet contributed anything to do so. The judicial review has progressed and the case gets into court on Jan 13th 2008, but we do need to raise more funds to cover our legal expenses and other costs. Please contribute if you wish us to win this fight and get fair compensation for the confiscation of your property. Please remember that you may get several pounds per share compensation if we win this case, but little or nothing if we do not. So please donate however much you can afford. Donations can be made via credit card or debit card from this page of our web site.
Roger Lawson
Chairman, Northern Rock Shareholders Action Group
Sunday 19 October 2008
Friday 17 October 2008
Then give us back our shares now
In a House of Commons debate on Monday 6th October Alistair Darling (Chancellor of the Exchequer, said:
"I am very aware of the importance of HBOS as an employer in Yorkshire, but if it is possible to reach a commercial solution to problems, that is by far the best route to pursue. A commercial decision was taken by HBOS and Lloyds TSB. Yes, we intervened to waive the competition rules that would otherwise have stopped it, but as I said in relation to Northern Rock a year ago—at that time many people believed that the best option was to try to find a commercial solution, but it did not work at the end of the day—one day even Northern Rock will have to be returned to the private sector. I do not think the Government can run banks particularly effectively, and I do not think that is desirable. If we can get a commercial solution in relation to these matters, that is far better."
"I am very aware of the importance of HBOS as an employer in Yorkshire, but if it is possible to reach a commercial solution to problems, that is by far the best route to pursue. A commercial decision was taken by HBOS and Lloyds TSB. Yes, we intervened to waive the competition rules that would otherwise have stopped it, but as I said in relation to Northern Rock a year ago—at that time many people believed that the best option was to try to find a commercial solution, but it did not work at the end of the day—one day even Northern Rock will have to be returned to the private sector. I do not think the Government can run banks particularly effectively, and I do not think that is desirable. If we can get a commercial solution in relation to these matters, that is far better."
Thursday 16 October 2008
Another open letter to Ronnie Campbell MP
Dear Ronnie,
I'm a Northern Rock small shareholder whose shares were obtained on privatization by virtue of being both an investor in and having my mortgage from Northern Rock. As such, they boosted my retirement plans, as did the dividends during the good times, and were valued at upwards of £10,000 at their peak. Consequently, I feel aggrieved at the manner in which the Government has handled this matter and has now arranged for the 'independent' valuation of the shares so that any compensation is likely to be close to zero. Since the re-structured company is paying back all Government loans (with interest) and since ultimately, according to Gordon Brown, Northern Rock may well be returned to private ownership "at a profit", why not return the newly profitable company to its rightful owners, the shareholders, at the appropriate time.
The "Rock" continues to attract criticism for its mortgage lending policy, but this was not very different from numerous other lenders at the time. The "Rock" management had the foresight to recognise an emerging credit problem, soon to be faced by all banks, and seek assistance via the regulatory authorities. Other European banks were allowed to borrow "anonymously" from the European Central Bank while the "tripartite authority" tailed to organise routine inter-bank support for the Northern Rock, which, helped by leaked information and meddling from the media, precipitated the infamous "run" on the bank. After Northern Rock were refused a £2b loan initially, the Government's "Special Liquidity Scheme" subsequently has had to provide multi billions of pounds in facilities for rival banks. Ironically, it turns out that the quality of Northern Rock's mortgage book is better than that of most of these rivals. I wonder if a bank based in the Home Counties would have been allowed to go to the wall in the way we have seen with the "Rock"?
Having retired two years ago, I hope that my advanced planning will enable me to withstand the current economic downturn, but the Northern Rock shares were certainly meant to be a substantial plank in the whole structure and influenced the early timing of my retirement. Like many other ordinary people, homeowners, investors and Northern Rock staff, who are the real losers from the failings of the "tripartite authority", I feel strongly that we deserve a better deal. I feel that Northern Labour MPs could present a united front and be more vocal in their support for the people in the North East. I hope that you can reassure me on this point.
Yours sincerely,
Another Cramlington Constituent
I'm a Northern Rock small shareholder whose shares were obtained on privatization by virtue of being both an investor in and having my mortgage from Northern Rock. As such, they boosted my retirement plans, as did the dividends during the good times, and were valued at upwards of £10,000 at their peak. Consequently, I feel aggrieved at the manner in which the Government has handled this matter and has now arranged for the 'independent' valuation of the shares so that any compensation is likely to be close to zero. Since the re-structured company is paying back all Government loans (with interest) and since ultimately, according to Gordon Brown, Northern Rock may well be returned to private ownership "at a profit", why not return the newly profitable company to its rightful owners, the shareholders, at the appropriate time.
The "Rock" continues to attract criticism for its mortgage lending policy, but this was not very different from numerous other lenders at the time. The "Rock" management had the foresight to recognise an emerging credit problem, soon to be faced by all banks, and seek assistance via the regulatory authorities. Other European banks were allowed to borrow "anonymously" from the European Central Bank while the "tripartite authority" tailed to organise routine inter-bank support for the Northern Rock, which, helped by leaked information and meddling from the media, precipitated the infamous "run" on the bank. After Northern Rock were refused a £2b loan initially, the Government's "Special Liquidity Scheme" subsequently has had to provide multi billions of pounds in facilities for rival banks. Ironically, it turns out that the quality of Northern Rock's mortgage book is better than that of most of these rivals. I wonder if a bank based in the Home Counties would have been allowed to go to the wall in the way we have seen with the "Rock"?
Having retired two years ago, I hope that my advanced planning will enable me to withstand the current economic downturn, but the Northern Rock shares were certainly meant to be a substantial plank in the whole structure and influenced the early timing of my retirement. Like many other ordinary people, homeowners, investors and Northern Rock staff, who are the real losers from the failings of the "tripartite authority", I feel strongly that we deserve a better deal. I feel that Northern Labour MPs could present a united front and be more vocal in their support for the people in the North East. I hope that you can reassure me on this point.
Yours sincerely,
Another Cramlington Constituent
Wednesday 15 October 2008
An open letter to Frank Cook MP
Dear Mr Cook,
We have or should I say had, 1500 shares in Northern Rock which was part of our savings to make our life a little easier in retirement and not have to depend on the state to keep us in our latter years.
This is not the case now as our shares have been stolen by this labour government. Northern Rock’s problems were not of their making but more the fact that the treasury cannot keep their affairs confidential.
I would ask if you have any power to bring pressure on the PM or the Chancellor to at least give fair treatment to the share holders and save many of us having to live of the state, we all do not have a gold plated pension.
Yours sincerely,
A Billingham constituent, aged 77
If you'd like to email Frank Cook MP click HERE
We have or should I say had, 1500 shares in Northern Rock which was part of our savings to make our life a little easier in retirement and not have to depend on the state to keep us in our latter years.
This is not the case now as our shares have been stolen by this labour government. Northern Rock’s problems were not of their making but more the fact that the treasury cannot keep their affairs confidential.
I would ask if you have any power to bring pressure on the PM or the Chancellor to at least give fair treatment to the share holders and save many of us having to live of the state, we all do not have a gold plated pension.
Yours sincerely,
A Billingham constituent, aged 77
If you'd like to email Frank Cook MP click HERE
No legal case for Rock bosses
The BBC reported yesterday that Northern Rock has said it will not take legal action for negligence against the executives in charge of the bank before its collapse.
A review by lawyers and accountants into the management led by chief executive Adam Applegarth found "insufficient grounds" to proceed. It also concluded the firm's auditors should also avoid any action.
Ron Sandler, the firm's non-executive chairman, said he was "pleased" with the progress but said the Rock was still "significantly loss-making" and that returning it to profit and back to private ownership was "some years away".
Mr Sandler said it was "too early to say" how the part-nationalisation of Royal Bank of Scotland, Lloyds TSB, and HBOS would change the UK's banking industry.
Having been brought in to run the bank after its nationalisation, Mr Sandler was replaced as chief executive by Gary Hoffman on 1 October.
A review by lawyers and accountants into the management led by chief executive Adam Applegarth found "insufficient grounds" to proceed. It also concluded the firm's auditors should also avoid any action.
Ron Sandler, the firm's non-executive chairman, said he was "pleased" with the progress but said the Rock was still "significantly loss-making" and that returning it to profit and back to private ownership was "some years away".
Mr Sandler said it was "too early to say" how the part-nationalisation of Royal Bank of Scotland, Lloyds TSB, and HBOS would change the UK's banking industry.
Having been brought in to run the bank after its nationalisation, Mr Sandler was replaced as chief executive by Gary Hoffman on 1 October.
Tuesday 14 October 2008
An open letter to Ronnie Campbell MP
Dear Sir,
I am an 80 year old pensioner living in the North East who invested in Northern Rock some years ago on the understanding that the banks of this country were regarded as being as "safe as houses" and usually guaranteed to produce a reasonable return to investors. The circumstances that NRK experienced appear to have much in common with those that many of the major banks are encountering at the present time if my interpretation of newspaper reports is right. Yet these banks are being effectively supported by the Special Liquidity Scheme set by the Government after we had our shares removed.
Yvette Cooper quoted recently in the "Guardian" called the action taken by the Government as "nationalisation", but Gordon Brown is quoted as calling it "Temporary Public Ownership" and saying that ultimately NRK would likely be returned to private ownership at a profit. If the Government felt obliged to take it over in order to make it profitable then surely the shareholders who maintained their investment to the bitter end because of their faith in the British banking system should again resume ownership or be compensated for their loss.
As you are a MP for part of the North East I, along with countless others in this part of the country, automatically look to you to press the Government for some satisfactory solution to this situation at the Judicial Review to be held in January 2009, My understanding is that this debacle never should have occurred in the first place had the "Financial Watchdogs" been more effective.
Yours sincerely,
A constituent from Cramlington
I am an 80 year old pensioner living in the North East who invested in Northern Rock some years ago on the understanding that the banks of this country were regarded as being as "safe as houses" and usually guaranteed to produce a reasonable return to investors. The circumstances that NRK experienced appear to have much in common with those that many of the major banks are encountering at the present time if my interpretation of newspaper reports is right. Yet these banks are being effectively supported by the Special Liquidity Scheme set by the Government after we had our shares removed.
Yvette Cooper quoted recently in the "Guardian" called the action taken by the Government as "nationalisation", but Gordon Brown is quoted as calling it "Temporary Public Ownership" and saying that ultimately NRK would likely be returned to private ownership at a profit. If the Government felt obliged to take it over in order to make it profitable then surely the shareholders who maintained their investment to the bitter end because of their faith in the British banking system should again resume ownership or be compensated for their loss.
As you are a MP for part of the North East I, along with countless others in this part of the country, automatically look to you to press the Government for some satisfactory solution to this situation at the Judicial Review to be held in January 2009, My understanding is that this debacle never should have occurred in the first place had the "Financial Watchdogs" been more effective.
Yours sincerely,
A constituent from Cramlington
Monday 13 October 2008
An open letter to John Cummings MP
Dear Mr Cummings,
I am writing to ask you for your support in trying to get the government to compensate all the people who were robbed of half the Equitable life pensions they had worked for.
The ombudsman's report recommended that the government should give compensation after 4 years of investigating the reasons for the losses.
I am 79 years of age and living on the totally inadequate state pension and the pittance left of Equitable life pension.
I am from a family of lifelong labour supporters my father being a miner and mother a labour Seaham councillor.
I thought a labour government would look after our welfare but they have also robbed me of the few Northern rock shares that I had.
Where will it all end?
Are they just waiting for us all to die and the problem would go away?
I appeal to you for your help and support.
Yours faithfully,
A constituent in Peterlee, Co. Durham
If you'd like to email John Cummings MP click HERE
I am writing to ask you for your support in trying to get the government to compensate all the people who were robbed of half the Equitable life pensions they had worked for.
The ombudsman's report recommended that the government should give compensation after 4 years of investigating the reasons for the losses.
I am 79 years of age and living on the totally inadequate state pension and the pittance left of Equitable life pension.
I am from a family of lifelong labour supporters my father being a miner and mother a labour Seaham councillor.
I thought a labour government would look after our welfare but they have also robbed me of the few Northern rock shares that I had.
Where will it all end?
Are they just waiting for us all to die and the problem would go away?
I appeal to you for your help and support.
Yours faithfully,
A constituent in Peterlee, Co. Durham
If you'd like to email John Cummings MP click HERE
Tuesday 7 October 2008
Rock has repaid more than half its £27bn loan
The Journal is reporting today that the Rock has repaid more than half of the £27bn loan from the taxpayers. Revealed by the Chancellor yesterday, Alistair Darling also defended the decision to take the lender into public ownership earlier this year.
This news comes shortly after it was reported that customers had already deposited £4bn in the bank as of last month as confidence grew.
The repayments have been as a result of redemption of mortgages and are happily ahead of schedule.
The statement comes after Gordon Brown’s so called economic ‘War Cabinet’ named the National Economic Council which brings together senior ministers to co-ordinate the response to the current crisis.
Furthermore, Mr Darling confirmed that the Financial Services Authority is increasing from £35,000 to £50,000 the size of bank deposit the Government will guarantee. This will cover 98% of accounts.
The measure does not compare with blanket guarantees the German, Irish and other EU governments have given to depositors. The measure also did not impress the markets, as the plummeting FTSE showed.
Mr Darling also refused to be drawn on opposition calls for a government-backed recapitalisation of the banks, primly declining to provide a "running commentary" on his deliberations.
This news comes shortly after it was reported that customers had already deposited £4bn in the bank as of last month as confidence grew.
The repayments have been as a result of redemption of mortgages and are happily ahead of schedule.
The statement comes after Gordon Brown’s so called economic ‘War Cabinet’ named the National Economic Council which brings together senior ministers to co-ordinate the response to the current crisis.
Furthermore, Mr Darling confirmed that the Financial Services Authority is increasing from £35,000 to £50,000 the size of bank deposit the Government will guarantee. This will cover 98% of accounts.
The measure does not compare with blanket guarantees the German, Irish and other EU governments have given to depositors. The measure also did not impress the markets, as the plummeting FTSE showed.
Mr Darling also refused to be drawn on opposition calls for a government-backed recapitalisation of the banks, primly declining to provide a "running commentary" on his deliberations.
Thursday 2 October 2008
The journo everyone loves to hate....
A blog and journo we recommmend for all readers is Robert Preston who is famous for spilling the beans on the Northern Rock story. He is always well informed on the issues, writes almost daily and is well worth regular reading.
Find his blog at http://www.bbc.co.uk/blogs/thereporters/robertpeston/
Find his blog at http://www.bbc.co.uk/blogs/thereporters/robertpeston/
Wednesday 1 October 2008
Anger as former Northern Rock boss rakes in cash betting on credit crunch - the Sunday Sun article in full
In response to requests, we reproduce here the full article that appeared in the Sunday Sun, Sept 28 2008:
Sep 28 2008 by Michael Kelly, Sunday Sun
A FORMER Northern Rock boss has come under fire after it was revealed her husband made £28m out of the credit crunch.
Nichola Pease was a director of the Newcastle-based bank before it crashed in September last year, leaving more than 2000 workers facing the dole.
Around 150,000 shareholders, including many pensioners, lost around more than £2bn as the Northern Rock went into meltdown.
Ms Pease, who was a non-executive director for eight years, stood down from the Northern Rock in November. She had been paid around £65,000-a-year for her part-time job at the bank. The 47-year-old mum-of-three was already reportedly the 20th richest woman in Britain.
She is the chief executive of J Hambro Capital Management and is married to hedge fund manager Crispin Odey.
The pair, who are believed to be worth around £300m, are nicknamed the “Posh and Becks” of the City of London.
It has since been reported that Odey Asset Management bet on bank shares falling. The foresight helped the company make £64.6m, out of which Mr Odey has paid himself £28m, it has been claimed.
Ms Pease and her husband have declined to discuss the reports.
The couple have done nothing legally wrong but the news has led to an angry response in the North East.
Robin Ashby, spokesman for the Northern Rock Small Shareholders’ Group, said: “I have long been concerned about the performance of the non-executive directors of Northern Rock, prior to the crash, in their role of holding the executive to account on behalf of the shareholders.
“What did they do to earn the fat fees they received? Did they do much except warm chairs? They were supposed to be industry experts. Clearly, Ms Pease has money-making skills.
“It’s a pity they were not more evident in preventing the catastrophic losses suffered by shareholders and employees.”
Labour MP for Durham North Kevan Jones has campaigned on behalf of Northern Rock workers facing redundancy. He said: “Thousands of small shareholders and staff at Northern Rock will be angry at this revelation.
“It seems that the former directors of Northern Rock’s gilded lives continue, while it is the little people who suffer.
“The people I feel sorry for are the members of staff who were encouraged to buy shares, even when others knew the bank was in trouble.
“There is no illegality about what has taken place but these people live in a different, privileged world.”
However, one highly-placed Northern Rock source said: “Nicola Pease had a very high reputation. She was extremely competent and very, very honest. Of all the directors, she can be blamed the least for what happened.”
Sep 28 2008 by Michael Kelly, Sunday Sun
A FORMER Northern Rock boss has come under fire after it was revealed her husband made £28m out of the credit crunch.
Nichola Pease was a director of the Newcastle-based bank before it crashed in September last year, leaving more than 2000 workers facing the dole.
Around 150,000 shareholders, including many pensioners, lost around more than £2bn as the Northern Rock went into meltdown.
Ms Pease, who was a non-executive director for eight years, stood down from the Northern Rock in November. She had been paid around £65,000-a-year for her part-time job at the bank. The 47-year-old mum-of-three was already reportedly the 20th richest woman in Britain.
She is the chief executive of J Hambro Capital Management and is married to hedge fund manager Crispin Odey.
The pair, who are believed to be worth around £300m, are nicknamed the “Posh and Becks” of the City of London.
It has since been reported that Odey Asset Management bet on bank shares falling. The foresight helped the company make £64.6m, out of which Mr Odey has paid himself £28m, it has been claimed.
Ms Pease and her husband have declined to discuss the reports.
The couple have done nothing legally wrong but the news has led to an angry response in the North East.
Robin Ashby, spokesman for the Northern Rock Small Shareholders’ Group, said: “I have long been concerned about the performance of the non-executive directors of Northern Rock, prior to the crash, in their role of holding the executive to account on behalf of the shareholders.
“What did they do to earn the fat fees they received? Did they do much except warm chairs? They were supposed to be industry experts. Clearly, Ms Pease has money-making skills.
“It’s a pity they were not more evident in preventing the catastrophic losses suffered by shareholders and employees.”
Labour MP for Durham North Kevan Jones has campaigned on behalf of Northern Rock workers facing redundancy. He said: “Thousands of small shareholders and staff at Northern Rock will be angry at this revelation.
“It seems that the former directors of Northern Rock’s gilded lives continue, while it is the little people who suffer.
“The people I feel sorry for are the members of staff who were encouraged to buy shares, even when others knew the bank was in trouble.
“There is no illegality about what has taken place but these people live in a different, privileged world.”
However, one highly-placed Northern Rock source said: “Nicola Pease had a very high reputation. She was extremely competent and very, very honest. Of all the directors, she can be blamed the least for what happened.”
The problem with bailouts.....
From the FT:
If you owe the bank $10, it’s your problem. If you owe the bank $10m, it’s the bank’s problem.
If you and a million others owe the bank $10 each, it’s still your problem – but now it’s also the bank’s problem.
If the bank then sells to an investor the $10 you owe, it ought to be the investor’s problem. But if you have a problem repaying the $10 and the bank insured the investor against your problem, then it’s both the investor’s problem and the bank’s problem.
Your problems and your neighbours’ problems and the investor’s problems mean the bank now owes another bank $10bn. That is both banks’ problem. But if banks can’t or won’t pay the $10bn they owe to other banks, it’s very quickly a $700bn systemic problem.
And if the government then owes the banking system $700bn, it’s your problem.
If you owe the bank $10, it’s your problem. If you owe the bank $10m, it’s the bank’s problem.
If you and a million others owe the bank $10 each, it’s still your problem – but now it’s also the bank’s problem.
If the bank then sells to an investor the $10 you owe, it ought to be the investor’s problem. But if you have a problem repaying the $10 and the bank insured the investor against your problem, then it’s both the investor’s problem and the bank’s problem.
Your problems and your neighbours’ problems and the investor’s problems mean the bank now owes another bank $10bn. That is both banks’ problem. But if banks can’t or won’t pay the $10bn they owe to other banks, it’s very quickly a $700bn systemic problem.
And if the government then owes the banking system $700bn, it’s your problem.
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