Former Northern Rock chief issues apology

Matt Ridley, the former boss of Northern Rock between 2004 and 2007, has today issued a seemingly heartfelt apology regarding the collapse of the former leading mortgage provider in the UK. Matt Ridley, together with a number of former Northern Rock executives, received severe criticism in the financial press when the bank collapsed and needed £26 billion of taxpayer's money to stop it going out of business.

While there is no doubt that there were mistakes made at Northern Rock, which had a potentially risky business model, there were very few investors and very few analysts asking questions when the bank was going from strength to strength and increasing profitability year on year. The problem was that Northern Rock had limited reserves and took significantly reduced deposits from customers with the rest of the money borrowed from the money markets. This worked in the good times but when money market rates started to go through the roof this is when the whole business model of Northern Rock unravelled, as did the company.

Many executives formally connected with Northern Rock have been severely reprimanded by the FSA and a number have actually been "banned" from further involvement in the UK financial arena for many years.