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15 Jan, 2008


Marcel Le Gouais
Date: 15-Jan-2008

Northern Rock's chairman has revealed the bank has become completely reliant on the Bank of England and the Treasury to continue to trade.
Speaking at the bank's EGM with shareholders, Bryan Sanderson revealed the depth of its troubles, but moved to s...

Northern Rock's chairman has revealed the bank has become completely reliant on the Bank of England and the Treasury to continue to trade.
Speaking at the bank's EGM with shareholders, Bryan Sanderson revealed the depth of its troubles, but moved to stave off nationalisation fears, saying he was doing his "damnest" to find a private rescue.

At Newcastle's Metro Radio Arena, he told shareholders: "Northern Rock has struggled to refinance its liabilities other than through the BoE's loan.

"We cannot reverse history but with your support we can help set this company on the road to recovery."

As the board prepared for a vote that could give shareholders more power over the bank's future, Sanderson warned such a move would restrict the board's ability to issue shares or assets at a time of urgent need for liquidity.

He adds: "We have £100bn in assets and liabilities, so managing these is extremely complex."

He said it was vital to protect the interests of staff, taxpayers to whom NR owes more than £1,000 each, and the maintenance of the UK's reputation as a centre for financial excellence. The last of these, he indicated, could end up being the most important.

Sanderson warned that calling the Treasury's bluff, as some within the lender have called for, would be playing Russian roulette with the bank, as the Treasury and the BoE could withdraw support at any moment.

       
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