The Ritchie rewrite

The EU has approved the plan to split Northern Rock into good and bad banks. The latter includes the notorious Granite that helped bring down the bank, and which took me a lot of effort to expose two years ago.

It\’s just that Granite didn\’t bring down Northern Rock.

It was the unsecuritised loans that did: they couldn\’t roll over their paper in the wholesale markets and thus couldn\’t fund the loans they had already made.

Those loans that were in Granite and had secured long term financing were the very thing which DID NOT bring Northern Rock down. It was the ones that they hadn\’t yet shoved into Granite which did.

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