The shambles being left by Gordon Brown“.

xxxxxxxxxxxxx cs
=============
POLITICSHOME Blog 5.8.08
Cable: Northern Rock directors should face legal action

Vince Cable, Liberal Democrat Treasury Spokesman
10:14 BBC News

Mr Cable said that the public had been deceived over Northern Rock's
original state.

He said the public had been told that its loans were "being secured
against its assets" and that in fact there was "no security, no
protection".

He added that the bank should never have been allowed to give
mortgages of up to 125% of a property's value, describing the
strategy as "totally suicidal".

Asked about the government's strategy during the crisis Mr Cable
said: " the view of I and my colleagues took was that it was not
necessary [for the government to step in], but once they had done so
they had to nationalise it."

Mr Cable called for legal action to be taken against those who were
running the bank when it failed.

"They should go after the directors and challenge the auditors," he
said.

He added: "I don't think that criminal action is what is involved
here...as taxpayers we should challenge these people who've got away
scott free."

10:38 Sky News
Later, Mr Cable warned that Northern Rock coud be facing further
losses.
“The company has effectively converted loans that we thought were
fully secured against good mortgages … into shares which have no
protection if the company deteriorates,” he said. [This is the
government’s doing -cs]
He added: “There is potentially a very large loss coming down the
line there”.
He also criticised the “grossly wreckless” [sic] loans that the bank
had made.

“I and my colleagues warned the government that they must stop the
bank from advancing these 125% mortgages,” he said.
He accepted that because of the postion of the bank it would be
difficult for taxpayer to be repaid in full.

“The best hope there now is that the bank continues to be managed in
a way that retrieves as much money as possible or taxpayer and
eventually conditions in the market will improve and it may be
possible to resell the banks,” he said.