Chuka\’s great new idea

Let\’s give Northern Rock to the depositors, why not?


Two things:

1) Are they going to pay for it? The \”good bank\” part of NR has a value. Why should we the taxpayers make a gift of that value to the depositors who will then own it? So, how much are they going to pay and how?

2) Building Societies are less risky are they?

Tell that to the depositors in the Derbyshire, Cheshire, Barnsley, Scarborough, Dunfermline societies.

In fact, more British Building Societies went bust than British banks went bust.

5 thoughts on “Chuka\’s great new idea”

  1. The Chelsea, the Stroud & Swindon and the Britannia have also merged out of existence lately. And the Kent Reliance.

  2. I don’t get the left’s lionising of the building societies. They can’t be active members of any, as far as I can see. I mean sure, building societies are a good part of the economic fabric of the nation, but this idea that everything would be fine if it were all run mutually is just crackers.

    I just voted in my building society AGM, and to refresh my memory checked how the votes were cast last year. The most contested vote (unsurprisingly) remuneration, where the Board barely scraped through with a mere 90% of the votes in favour. My reckoning is that most people just let the Chairman vote on their behalf, and so the society basically runs itself without any chance of the members ever pulling the Chairman down a peg or two.

    Contrast that with share-based voting, where at least a single sizeable shareholder has a chance to throw some serious weight around and get the Board to listen. One may not always like the way some shareholders use that clout, but by golly it’s better for someone to have it than for no-one to.

  3. this might be a stupid idea, but why get drawn on the red herring of building societies? And name me one that has actually gone bust please.

    Tim adds: All those listed got taken over because they’d gone bust.

  4. Northern Rock was stolen from the shareholders, most of whom (in number, if not value) were the depositors who had become shareholders on demutualisation.
    So this plan will win a lot of votes by giving back to some people the assets that New Labour had stolen from them.
    The valuer appointed by Darling estimated (on some funny assumptions designed to understate shareholders’ equity) that Northern Rock was worth £2.5 billion when taken into government control, but that no compensation should be paid to shareholders.This was after HMG charged Northern Rock for the cost of the advice from Goldman Sachs to the Treasury – when did a private sector company last charge its investment bankers’ fees to the target of an unwelcome and unwarranted takeover bid?
    Go read the report!

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