Northern rock, stick the knife in.

[Cyberman]

He is getting this ridiculous payment because top managers have contracts that contain rewards for failure - have you heard of WorldCom? They effectively gone bust but the CEO awarded himself ridiculous amount of money - the guy was found guilty of fraud - he got 25 years in prison, that's the kind of response that should have been done rather than awarding these money. If I was that new CEO appointed by the Govt I'd tear down contract and pay not a pence to that guy - let him sue you and get all the juicy details on public what decisions he made there and how they affected the company.

Adam Applegarth did not commit fraud and with liquidity the Rock is actually a very profitable company(450 million before tax even after the current BofE inspired debacle). All he did was to put all his eggs in one basket and perhaps grew Northern Rock too quickly, in hindsight.
The FSA obviously did not think that his strategy was wrong, and also did not envisage the money markets drying up. May I also add that HBOS relies on 31% of its borrowing from the money markets and it has much bigger liabilities that require funding coming up in the next 12 months than the Rock ever had!! You could well soon be saying that the Chairman of HBOS is a fraudster, based on your logic.

[AtW]

Adam Applegarth did not commit fraud and with liquidity the Rock is actually a very profitable company(450 million before tax even after the current BofE inspired debacle).

He failed in a big way, and he engaged in a behavior that helped prop up property bubble in this country. A very long jail sentence is the most appropriate sentence in this case - along with confiscation of any gains he made during period of his activities.

He got away with it. Clearly a man without honour who accepts nearly £1 mln payoff while his coworkers will be sacked with 3 months pay if they are lucky.

The FSA obviously did not think that his strategy was wrong

FSA screwed up - that's obvious now, I doubt they did anything at all as they should have prevented any bank from giving 125% morgages or even 95% - that should not have been legally possible, yet it was and that was driving extremely huge property bubble - when it finally pops the shockwave will be so strong that a lot of people will bleed from their ears.

You could well soon be saying that the Chairman of HBOS is a fraudster, based on your logic.

I'd say HBOS (Halifax in particular) are next in line for their actions that helped build this property bubble - irresponsible lending by banks is what allowed to create the imbalance in the economy.

High rewards should always be balanced with high penalties - those CEOs here and USA are getting it way too easy: they screw up, get lots of people fired, yet they walk away with huge sums anyway. I am not bothered if people earn a lot of money, however if they fail so miserably and bring misery on many other people then they should be grateful that they can actually walk at all, rather than drive away in a Range Rover full of golden goodbye cash.

--

We will see in the next 18-24 months quality of the morgage book of NR - my prediction is that they will have a lot of default because no sane bank would give big morgages to the people that NR lended moneh to. This means those people will have to manage paying 7.5%+ back to the Rock, or lose their house. Well, not their house - it was never their own until they paid out ridiculous morgages that they so foolishly decided to take.

[Board Game Geek]

I look forward to the day when nurses feel they can afford to buy their own place

Hear hear !

[BrilloPad]

The FSA obviously did not think that his strategy was wrong, and also did not envisage the money markets drying up.

The FSA are happy if page 434, paragraph 6(b) is satisfied. The do not see what the FSA is really there for.

Mind you, for ever developer at ClientCo there are 10 hangers on. maybe they could all go join the FSA?

[Diver]

I look forward to the day when nurses feel they can afford to buy their own place

But who will rent my BTL's

[BrilloPad]

But who will rent my BTL's

immigrants. unless they send them all home.

[TheFaQQer]

NR simply has no alternative but to scale down morgage book.

They have two alternatives.

1 - Scale down the mortgage book

2 - Increase interest rates on long-term deposits

These are not mutally exclusive, yet they are only focussing on the first.

[Cyberman]

They have two alternatives.

1 - Scale down the mortgage book

2 - Increase interest rates on long-term deposits

These are not mutally exclusive, yet they are only focussing on the first.

Unfortunately, due to EU competition laws they are not allowed to offer sky high interest rates because other banks may sue over unfair competition due to state aid. What is so ironic that those other banks may themselves also need major state aid for liquidity purposes before long. Rumour has it that the BofE lending is already at 15 Billion, excluding the Rock.

[TheFaQQer]

Unfortunately, due to EU competition laws they are not allowed to offer sky high interest rates because other banks may sue over unfair competition due to state aid. What is so ironic that those other banks may themselves also need major state aid for liquidity purposes before long. Rumour has it that the BofE lending is already at 15 Billion, excluding the Rock.

But they could at least offer something comeptitive - they're not even close at the moment.

I hadn't realized that it's not allowed to be sky high rates, though.

[Churchill]

I look forward to the day when nurses feel they can afford to buy their own place

I look forward to being able to go into hospital with a broken arm and leave without contracting MRSA!

Then the lazy bitches can have a house!