Bank story was like no other

Sep 13 2008 by Babette Decker, The Journal

THIS time last year Northern Rock began a process many thought would see it collapse. Adrian Pearson looks at how the region united to back the bank

AS soon as the news broke and queues began to form outside Northern Rock branches, it was obvious the bank was going to be a story unlike any other The Journal had covered.

From day one there was a clear indication that support rather than neutral coverage would be needed.

And as the national Press turned on the bank, and the region, The Journal started a campaign which would make headlines around the world.

The panic started late on Thursday September 13 when the BBC’s Robert Peston revealed the emergency bail out.

By the morning, queues were present at some branches before staff arrived and there would be a greater rush as the scale of the loan emerged.

The Government urged the 1.5 million savers not to panic, which many suspect sent even more to empty their accounts.

By the end of the first full day of the run on the bank senior staff at The Journal had already decided the paper would wear its heart on its sleeve.

On Saturday September 15 readers were left in no doubt as to what we thought of the situation with a front page headline reading: “6,500 jobs created and £175m spent on the social fabric of this region – we should not be deserting them now.”

And those facts were to remain central to a campaign which soon galvanised the region behind the Rock. Adam Applegarth said that although it had been “a pretty rotten day”, the bank was still in business and intended to remain so. He and the previous board now face the prospect of legal action, a feature which would not emerge until months later.

But one dangerous fact was lurking in the minds of savers – the Government could not yet guarantee all their money was safe. Only the first £2,000 were covered, after that only 90% of savings up to £33,000 and then no cover at all. On Monday’s front page The Journal urged readers to help turn around the Rock’s fortunes by depositing up to £2,000 with the troubled lender, reminding our readers this money was “as safe as the Bank of England”.

Then the Government finally acted to stop the run, guaranteeing all savings in the bank.

As business leaders and charities backed The Journal’s campaign and opened up new accounts, our front page urged readers to remember the 1,520 organisations which had benefited from the Rock’s help.

Readers were told on Tuesday, September 18 the bank was safe and “Now it’s your turn to help”.

The next day our campaign was gathering pace, while queues outside branches were down to a trickle.

Then the Newcastle Falcons were called upon to set up an account with the bank, as did The Journal’s editor and deputy editor.

Hundreds of businesses contacted the office to get a copy of the previous day’s front page and proudly show their support for the bank and the region.

But as the tide turned it was clear the bank would still be in a financial mess. More than £2bn had been withdrawn in two days, and for many the prospect of a sale was already unlikely.

Brian Aitken, editor of The Journal, said: “From the very start, we realised that Northern Rock was more than just a news story.

“Here was a bank that had become an institution in the North East, sponsoring the region’s football, rugby and cricket teams and employing thousands of local people.

“But it had also – through the Northern Rock Foundation – been one of the biggest patrons of the arts and local charities in the region.

“We felt The Journal could not stand by and do nothing.

“The Rock had helped many people down the years and now it needed some help from us and so the campaign was launched.”