ABSTRACT
When the Northern Rock crisis erupted in 2007 the British government intervened to prop up the failing business. The state provided loans and guarantees worth £100 billion of taxpayers’ money to dig Northern Rock out of the hole its managers had got it into playing the financial markets. Britain’s neoliberal administration temporarily nationalized the building society to restore it to health, pending a sell-off to private capital reluctant to invest in a failed business. They paid two consultants their market value of £90,000 and £75,000 a month respectively to do the job. Adam Applegarth, the company’s chief executive, who was responsible for Northern Rock’s failure in the market, received a pay-off of £760,000 while the market simultaneously judged that 2,000 Northern Rock employees should be made redundant. As the credit crunch bit, the Bank of England swopped rock-solid government bonds for billions of pounds of mortgage-backed securities that nobody else wanted in order to bail out the banks and restore confidence in the market.
