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City analysts today warned the government that the British economy is set to witness a recession which could last up to 18 months. Capital Economics predicts that the gross domestic product for the...
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Wednesday 18th June 2008
In a move which will be welcomed by many investors and economists it seems as though the ex-management of the fallen Northern Rock may face legal action for their part in the run on the bank. It seems as though the present management, led by Ron Sandler, has initiated lawyers to consider whether there is some kind of case against the former directors and the way the business was run.
Former chief executive Adam Applegarth has been at the centre of much discussion and criticism for the way he allowed the bank to grow beyond its means, ever more dependent on the money markets for finance. When the credit crunch hit home and finance dried up this plunged the Northern Rock into serious financial difficulties and caused the first run on a UK bank for decades.
However, behind the headlines and the various comments attributed to politicians and former shareholders, there are concerns that any legal action may highlight the relative inadequacy of the UK regulatory environment. Whether this would cause yet more concern and worry amongst members of the public and businesses remains to be seen, but there are fears that by taking the action to court it would open a whole new can of worms. |
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