Placing the Run on Northern Rock

Abstract

The collapse and subsequent nationalization of Northern Rock in 2007-08 was the first major run on a UK retail bank since 1866. The Northern Rock case is exemplary on two fronts. First, described at the time of its collapse as an example of an aggressive business model employed by naïve management, it is now clear that Northern Rock marked the beginning of and provides insights into the credit crunch and wider global banking crisis. Second, Northern Rock provides a distinct context - geographically and institutionally - from which to explore the banking crisis. The paper utilizes management interviews, secondary literatures and an investigation of the wider impacts of the restructuring of Northern Rock to produce a reading from the perspective of a peripheral financial region. It contributes to attempts to understand financial geographies that range beyond the major international financial centres that often dominate debates in Economic Geography.

Keywords: credit crunch, geographies of finance, demutualization, Northern Rock

JEL Classification: R11, O16, O10, L00