Northern Rock yet again!!

Sorry to revisit Northern Rock yet again but the weekend press has got me
thinking. It looks like a lot of people are guilty of 20-20 hindsight similar
to the collapse of Polly Peck, where one factor was the probing of the published
accounts by a Swiss German investor. If it was not for the credit crunch,
Northern Rock would still be around. If it was not for the Bank of England refusing
liquidity to help the interbank market, in constrast to the U.S Federal Reserve
and to the European Central Bank (ECB), then again the Newcastle-based institution
would be still with us. It looks like Northern Rock was hit by a perfect
storm.
However, Alistair Blair writes a perceptive piece in the Investors Chronicle, which
questions the famed low costs of Northern Rock and notes that its financial
strength was compromised by its reliance on short term borrowings rather than
customer deposits. Blair says the audit report could have been complemented by
a validation report, which would have pointed out its future financial
problems.
In the blame game nobody comes out very well but I thought Chancellor Alistair
Darling did put his head over the parapet in a media blitz. Some commentators
say Northern Rock depositors ignoring Darling's calls reflected the loss of trust
in politicians. Perhaps more of a factor was scrutiny of the deposit compensation
scheme. This led to a realisation with its lack of protection for relatively
minor sums.