More on Northern Rock - the Granite connection

First, Richard Murphy explains why Granite is part of Northern Rock and why Alistair Darling is a hypocrite - "I am not impressed. Ethics count for all in my book. And I’m left asking if Alastair Darling has any, at all, because what he is doing is dishonest (he is nationalising Granite in truth), unaccountable (he’ll live behind an unknown, unaccountable trust facade) and ultimately just an accounting con-trick. He knows he’s accountable for the Granite debt, and is denying it. It doesn’t get much lower than that."

Second, Burning Our Money has another excellent post on this matter - "Granite is an excellent example of financial sleight of hand. By bundling its highest quality most secure mortgages off its main balance sheet, and adding in a fat collateral cushion, Crock was able to borrow at lower rates in the international wholesale market. But its existing onshore lenders and depositors (in particular Mr and Mrs Joe Public) were left lending to an entity that was correspondingly much less secure. Of course, they had no idea what was going on and imagined NR was just the same old safe-as-houses High St presence it had always been. What a shame we didn't have a financial regulator full of bright savvy people, poring over the books and blowing the whistle before things got out of hand. But all we had was Brown's hopeless FSA."