Ridley gets no payoff from the Rock
August 6, 2008
Northern Rock, the stricken High Street bank that went through a period of turmoil recently, has recently announced that it will not be offering any golden handshake payout to Matt Ridley, who has been chairman of Northern Rock for the past three years. Mr Ridley resigned recently following the crisis that hit the bank, when it was forced to go to the Bank of England for a bailout loan, and as a result savers withdrew over £2 billion worth of their money from the bank through fears that the bank might fold.
Mr Ridley was accused by the Treasury Select Committee of “damaging the good name of British banking”. He had offered to resign earlier but was asked to stay on to face questioning by the Treasury Select Committee. The recent turmoil resulted in the first run on a British bank for 150 years, and in addition to billions of pounds being withdrawn from Northern Rock over a matter of days share prices for the bank also plummeted in the same period.
Although Matt Ridley did offer to resign he also said in his defence that the problems suffered by the bank could not have been predicted. He stated: “We were subject to a completely unprecedented and unpredictable closure of the world credit markets.” Following the turmoil Northern Rock has been in talks over the sale of some or all of the business, and has had to withdraw two thirds of its mortgage products in order to reign in lending and cut costs.
In the meantime the next chairman to be appointed in the light of Mr Ridley’s departure is the former chairman of Standard Chartered and Bupa, Brian Sanderson. Mr Sanderson has been awaiting approval from the Financial Services Authority so that his new role at Northern Rock can be confirmed.
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