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Northern Rock Crisis: Old and New Solutions

It is manifestly clear that the bank was insolvent - for which there are in the UK 2 tests ;

1. Do the bank assets eceed their laibalities ?
2. Can the bank meet it's liabilities as they fall due ?

If the Directors (the only people who can make the decision , who may of course also take advice) consider they are insolvent they ae obliged by Company law to call in an an Insolvency Practitioner.

Loose claims we made by poiticians (including) the Chancellor of the Exchequer that the bank wa solvent - for which they had no ability to determine or position to make a claim.

As such they acted as Shadow Directors and may in fcat have claims made against them by shareholders.

EVidently the best solution in the circumstances, but by no means perfect was the old boys soft shoe shuffle by the bank over the weekend and carry on as if nothing had happened.

Mervyn was no mug and placed the decision fairly and squarely on the plates of PM and Cahncellor (onward and upward) and they fluffed it.

The Germns did it with the Bak in saxony whose name I forget and blow the EU rules. Result - peace of a kind.