The two parties have separately put the proposal forth, with Labour stating it was one option it would encourage while ensuring that the sale generates maximum value for money for the taxpayer.
Northern Rock was converted from a building society to a plc bank in 1997. However, the bank was nationalised after its collapse in 2008 and has subsequently been split in two, between a ‘good’ bank offering mortgages and savings and a ‘bad’ bank, named Northern Rock Asset Management. This is being merged with the nationalised Bradford & Bingley, with the aim of running its mortgage book down.
However, the remutualisation proposal has not been welcomed by all, with the chair of the All Party Parliamentary Insurance and Financial Services Committee, Conservative MP John Greenway, branding the plan as ‘crazy’ as it is likely to be demutualised once again.
The Financial Services Authority has fined Northern Rock’s former deputy chief executive David Baker £504,000, and its former managing credit director Richard Barclay, £140,000.
Baker has been banned from performing any function in relation to any regulated activity, while Barclay has been prohibited from performing any significant influence function at an FSA-regulated firm.
The FSA fined and banned the pair for making inaccurate and misleading statements to the board and market.
