Summary

The reference has not verified this book in detail; the summary states only what the title, author and subject establish.

Brian Walters wrote this account of the Northern Rock failure shortly after the events of September 2007, covering the bank's rise from a building society to a large mortgage lender and its collapse.

The material covers the demutualisation in 1997, the growth strategy pursued under Adam Applegarth that took the bank to a large share of new British mortgage lending, the funding structure based on securitisation through the Granite vehicle and on wholesale borrowing, the closure of those markets in August 2007, the request for Bank of England support and its disclosure, the queues at branches, and the eventual nationalisation.

The reference has not verified this book in detail. It was written quickly and predates the parliamentary inquiries, the Financial Services Authority's internal review and the academic literature. Readers wanting a fuller account should go to the edited volume by Bruni and Llewellyn, which analyses the same events with the benefit of the official record.

Key takeaways 6

Northern Rock's demutualisation in 1997 converted a building society into a bank pursuing growth in market share.
The bank funded mortgage lending through securitisation and wholesale markets rather than through retail deposits.
Closure of securitisation markets in August 2007 removed the funding on which the entire model depended.
Public disclosure of the request for emergency support converted a funding problem into a depositor run.
The bank's assets were largely performing, which shows that funding structure alone can destroy a bank.
The account was written before the official inquiries and does not have the benefit of their findings.