“Oh What a Fall Was There”: Northern Rock in 2007

Abstract

In the autumn of 2007 Britain experienced its first bank run of any significance since the reign of Queen Victoria.¹ The run was on a bank called Northern Rock. Britain had been free of such episodes not by accident, but because by early in the third quarter of the nineteenth century, the Bank of England had developed techniques to prevent them. These techniques had been used, in Britain and elsewhere, had worked, and appeared to be trusted. Nevertheless, it was the decision to provide support for the troubled institution that triggered the run. That run was halted only when the chancellor of the exchequer (Alistair Darling²) announced that he would commit taxpayers’ funds to guarantee every deposit at Northern Rock.