I believe that people are buying Northern Rock shares now, once it lost something like 25% of its value. Of course, that's after the govt announced it wouldn't let it collapse.
I see the BoE's actions as surge protection, or nuclear fission moderation: they could have let NR fail, but that would have aggravated the smaller runs that other banks were seeing and potentially caused a meltdown.
I think there should be a public inquiry into what happened, and probably some sort of punishment for NR's management, but allowing the entire UK financial services industry to become a smoking ruin is not a reasonable cost for punishing the failure of NR. It's not even clear that they did anything wrong yet, or whether it was just some sort of media-triggered panic.
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Date: 2007-09-19 12:50 pm (UTC)I see the BoE's actions as surge protection, or nuclear fission moderation: they could have let NR fail, but that would have aggravated the smaller runs that other banks were seeing and potentially caused a meltdown.
I think there should be a public inquiry into what happened, and probably some sort of punishment for NR's management, but allowing the entire UK financial services industry to become a smoking ruin is not a reasonable cost for punishing the failure of NR. It's not even clear that they did anything wrong yet, or whether it was just some sort of media-triggered panic.