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Bad Bank, Naughty Bank, In Your Bed!


I heard the news today, (oh boy), that the Government are planning to sell off Northern Rock by the end of the year after splitting it up. One of these parts would stay with the Government and would be, in essence, a “bad bank”. I understand further that head-hunters were out looking to find someone to run this bad bank, which got me thinking.

Question. How do you run a “bad bank”? Oh, and also, who would be best to run a “bad bank”?

Presumably it can’t be a hard job running a bad bank. At the end of the year you go for your annual revue with Gordon / Darling:-

GB/ D – So how did it go this year then?”

A – Obviously badly. We lost money. The loan book was based on capricious ground from the start.

GB / D – So you did badly then?

A – Yep

GB / D – Oh, so how do you explain that?

A – Er, well, it’s a … er, bad bank?

GB / D – Mmm, good point, ok keep up the good work, I can’t give you a bonus ‘cos that won’t look right, but I’m sure there will be a knighthood or something.

Anyway, the conversation may go something like that, but let’s face it; it can’t be rocket science to run a bad bank can it? I mean look at the “good” banks, you didn’t need banking qualifications to run them did you, so pointless starting now with a bad bank. In fact, why not get Adam Applegarth himself to run it. Makes sense, I mean he has got form.

Base it in the North-East where he would be welcomed back with open arms.

He will need to recruit though, so I suppose he will need an HR Director to handle that…I know, how about “Sir” Fred the Shred himself, brilliant. He comes across as a caring, sharing kinda guy. His style of, how did Dispatches on Channel 4 put it tonight, something like “abrasive, aggressive style of management coupled with a large ego and no real understanding of what was going on that was doomed to fail” – sounds familiar to me that one, (sorry, what’s done is done) – should go down well in the bad bank.

As for a Head of Risk, what about Andy Hornby? Why not? He can learn the job from scratch as he goes along. It won’t be hard for the number one Harvard Graduate surely.

In fact, get the whole team together. Sir Tom McKillop Strategy, Mergers & Acquisitions; perhaps Richard “Dick” Fuld can be brought in to run International Relations, he can even have his very own Gym (see Richard-Fuld-punched-in-face-in-Lehman-Brothers-gym.html); as for marketing… well, perhaps I’ll leave this space and you can all let me know your choice and I’ll publish the best!

On a serious note, well sort of, getting these people to run the new bad bank and being charged with actually making some money back for us, unpaid of course, is not a bad dose of Community Service. That means we don’t have to waste more money paying a huge salary for others to run it, and if they fudge it up again, hey, it’s a bad bank – duh!

Anyway, never mind that, what about “Rescued UK banks sell cheap home loans to Irish” ? Bad bank, naughty bank, in your bed!

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Andrew Montlake

Written by Andrew Montlake

Andrew Montlake, better known as Monty, began his journey with an Hons degree in Economics & Politics before starting in the mortgage industry in February 1994. As a main founder of Coreco in 2009, he successfully grew the brand, marketing, and communications, and was made MD in 2019 focussing on the overall vision, strategy, and culture of the company. As Coreco’s media spokesperson, Andrew can often be seen or heard on TV and radio as well as regularly commenting in the national, local, and trade press. He is the author of this acclaimed Mortgage Blog and is well-known for his social media, podcasts, and public speaking. Andrew is now proud to serve as Chairman of the Association of Mortgage Intermediaries, (AMI) as a cheerleader for the Mortgage Industry as a whole and continues to work at the coal face, writing mortgage business and advising clients.

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