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Northern Rock Fallout
- Northern Rock bring in McKinsey for rescue plan
- Northern Rock and taxation of nondoms threaten City’s global ranking
- Northern Rock borrowers told to go away
- Northern Rock Bill to Clear House of Commons Today
- Hedge Funds Pocket `Easy’ Gain on Northern Rock Drop
Northern Rock bring in McKinsey for rescue plan
- Daily Telegraph
Ron Sandler, picked by the Government to run Northern Rock in nationalisation, has asked management consultancy McKinsey to work on a business plan for the bank.
Mr Sandler is also considering hiring the investment bank NM Rothschild to advise him on Northern Rock’s future after it is formally nationalised. The legislation is due to go through the Commons and the Lords by tomorrow night.
Neither Rothschild nor McKinsey will formally be hired until after that. However, a delegation of five McKinsey consultants accompanied Mr Sandler to Northern Rock’s Newcastle office on Monday…..
Northern
Rock and taxation of nondoms threaten City’s global ranking – The Times of
London
The City’s preeminence as a competitive financial centre is under threat from the Northern Rock debacle and the proposed taxation of nondoms, according to authoritative unpublished research seen by The Times.
Every six months the City of London publishes The Global Financial Centres Index, which ranks the compet-itiveness of 46 world financial centres. The research is carried out by Michael Mainelli, Professor of Commerce at Gresham College, and his Z/Yen consultancy.
London has previously outranked New York, the second runner, as the ideal place to carry out financial services. However, the next report, due out next month, will show that the City’s lead has been cut drastically…..
Northern Rock borrowers told to go away
- Daily Telegraph
Northern Rock is advising customers to seek new mortgages with rivals as it attempts to shrink its loan book dramatically.
The stricken high street lender has told independent financial advisers (IFAs), who introduce most mortgage business, to encourage homeowners who are remortgaging to obtain loans with other banks.
Advisers say that Northern Rock is deliberating pricing itself out of the market and focusing on being a savings bank.
Melanie Bien, director of mortgage broker Savills Private Finance, said: "Northern Rock is encouraging existing clients to go elsewhere. We have had them come to us, saying that for people at the end of their deals they do not want the business any more. They just want to be a savings bank."…..
Northern Rock Bill to Clear House of Commons Today
- Bloomberg
Legislation to nationalize Northern Rock Plc will clear all its stages in the lower chamber of the U.K. Parliament today, allowing Treasury-picked managers to begin work this week.
The government won a vote in the House of Commons by 302-222 which rejected opposition party calls to limit Treasury powers to rescue other banks and to limit the lifetime of the bill. The vote paves the way for its passage through the House of Lords tomorrow before the government has the power to nationalize the bank.
Chancellor of the Exchequer Alistair Darling yesterday said the government would seize control of the bank it has been propping up since September and appointed Ron Sandler, who rescued Lloyd’s of London from the edge of bankruptcy in the 1990s, to run it. The Conservatives say the bill gives the government too many powers and they will vote against it…..
Hedge Funds Pocket `Easy’ Gain on Northern Rock Drop
- Bloomberg
Lansdowne Partners Ltd. and LNG Capital LLP were among investors that profited from an “easy” bet over the past year on the 93 percent decline in Northern Rock Plc, the bank being nationalized by the British government.
Northern Rock’s stock on loan, a figure often used as an indicator of short selling, was more than four times higher than the average for benchmark FTSE 100 companies in September, according to the U.K. settlement agency CrestCo. It reached 22.5 percent of shares for Northern Rock, compared with the average share lending of 5.2 percent, the data show.
“Everybody was at it because it was just so easy,” said Simon Cawkwell, a former accountant and investor who wrote “Evil’s Good,” a guide to short-selling. “I’d say it was shooting fish in a barrel, but it was easier than that. It was just pulling the trigger.”….
Tags: Credit Crunch, Northern Rock
