Customer Review

4.0 out of 5 stars Interesting insights into a fascinating period, 19 Dec 2013
Verified Purchase(What is this?)
This review is from: The Crunch: The Scandal of Northern Rock and the Escalating Credit Crisis (Paperback)
This version of the book was written before the story of Northern Rock (and the other banks) had completely unfolded but is still a good read.

The interesting thing about the Credit Crunch is it's not simply about right or wrong. Admittedly some of the players must have known they were disingenuous to say the least, but for a lot of them (like Northern Rock) it was more a matter of how much risk you should be taking, and how much you actually were. Adam Applegarth I'm sure still thinks today he was caught out by circumstances no-one could predict. This book reports that people in the know were worrying about the impending crisis 7 years beforehand.

It also answers the question (that other books don't cover) of why credit disappeared. Surely you can always get anything you want - at a price? Well it seems Northern Rock could have got funds but the tiny 1% increase in the cost was too much for their business model to cope with. In other words it wasn't a credit crunch but a market price adjustment outside the interest rate risk capabilities of Northern Rock. Northern Rock was therefore selling stuff too cheap. It was buying market share by ignoring risk. Ryanair could undercut competitors if it went down to one pilot and one stewardess per flight but of course the regulators won't let them. This book shows how the financial regulators were unable to bring the same order to the banks.

I've only given it 4 stars because it totally ignores the other big question - how much of the bank's problems were caused by the reckless funding behaviour versus how much was caused by lending to bad risks? There is no discussion on the quality of the loans. What was the good bank/bad bank split? How much money was lost due to 125% mortgages?

Ironically I was talking to someone from Virgin Money and they felt that although Adam Applegarth is painted as dominating Northern Rock, power is even more centralised on the new top man Jane-Anne Gadhia.

In the near future, Virgin Money is likely to be floated. At that point I hope Brummer writes another book so we can see where all the money went. I suspect into the pockets of Richard Branson.
Help other customers find the most helpful reviews 
Was this review helpful to you? Yes No

Be the first person to comment on this review.

[Add comment]
Post a comment
To insert a product link use the format: [[ASIN:ASIN product-title]] (What's this?)
Amazon will display this name with all your submissions, including reviews and discussion posts. (Learn more)
Name:
Badge:
This badge will be assigned to you and will appear along with your name.
There was an error. Please try again.
Please see the full guidelines ">here.

Official Comment

As a representative of this product you can post one Official Comment on this review. It will appear immediately below the review wherever it is displayed.   Learn more
The following name and badge will be shown with this comment:
 (edit name)
After clicking on the Post button you will be asked to create your public name, which will be shown with all your contributions.

Is this your product?

If you are the author, artist, manufacturer or an official representative of this product, you can post an Official Comment on this review. It will appear immediately below the review wherever it is displayed.  Learn more
Otherwise, you can still post a regular comment on this review.

Is this your product?

If you are the author, artist, manufacturer or an official representative of this product, you can post an Official Comment on this review. It will appear immediately below the review wherever it is displayed.   Learn more
 
System timed out

We were unable to verify whether you represent the product. Please try again later, or retry now. Otherwise you can post a regular comment.

Since you previously posted an Official Comment, this comment will appear in the comment section below. You also have the option to edit your Official Comment.   Learn more
The maximum number of Official Comments have been posted. This comment will appear in the comment section below.   Learn more
Prompts for sign-in
 


Review Details

Item

4.4 out of 5 stars (7 customer reviews)
5 star:
 (3)
4 star:
 (4)
3 star:    (0)
2 star:    (0)
1 star:    (0)
 
 
 
Used & New from: £0.01
Add to wishlist
Reviewer


Location: Central UK

Top Reviewer Ranking: 230,059