The bank’s share price has continued to fall, potential buyers have dropped out and those that are still interested have put a value on the Rock that’s “materially below the market price”.
There’s been further turmoil at the top of the bank as well. CEO Adam Applegarth has resigned although he’ll stay until the strategic review of the lender is complete (which is expected to be February at the latest).
One person who’s staying put (for now) is FD Dave Jones.
(The mind boggles at how he must feel every morning when the alarm goes off.)
I expect in the New Year the government is going to have to look at another aspect of this fiasco – the role of the tripartite authorities. That could have implications for the rest of the City.
Speaking at the Institute of Chartered Accountants in England and Wales annual policy summit, Kitty Ussher (the Economic Secretary to the Treasury) said the government must not overreact, reiterating that the principles-approach to regulation “hasn’t failed”.
The tripartite regulatory system has been criticised for letting the situation at Northern Rock get this bad but Ussher says there’s no serious discussion about changing the system.
“There are lessons to be learned,” she said. “We think the three-legged nature of tripartite is correct but we must ensure it’s effective.”
It was a different story from Shadow Chancellor George Osborne. “We need to sort out where leadership lies with liquidity issues,” he told the conference.
“The tripartite arrangement didn’t work.”
But it’ll be a tough issue to crack. The tripartite system must be reviewed because clearly something went wrong. But removing light touch regulation and replacing it with something, well, a little heavier may not be the answer either.
Delegates at the ICAEW event heard that New York is serious about reclaiming the title of pre-eminent global financial centre from London.
The challenge will be to find a solution that satisfies the need to prevent another Northern Rock-style crisis while maintaining our leading position.
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