Northern Rock – National Audit Office Report

George Walker, Centre for Commercial Law Studies, London

The National Audit Office (NAO) published its report on HM Treasury: The Nationalisation of Northern Rock on 20 March 2009 (HC298 2008-09). The 58-page report considers the background to the immediate crisis at Northern Rock and then the circumstances surrounding the search for a longer-term solution. The oversight of Northern Rock following nationalisation is considered with the Treasury’s capacity to respond and manage crisis events. A short chronology of events is provided with a methodology statement. The Treasury Committee Report on Northern Rock is noted with a summary of the bank’s use of securitisation and its Granite vehicle. The operation and functions of the Tripartite Authorities are summarised with the operation of the Financial Services Compensation Scheme (FSCS) and recommends good practices in mortgage sales processes. A summary of the private bids made for Northern Rock is also included with a short statement on the purpose of regulatory capital.