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Sunday 7 September 2008

Leading article

There may be trouble ahead

Extraordinary measures are sometimes necessary to quell the madness of crowds. When Diana, Princess of Wales’s mourners threatened to vent their angry grief on the institution of monarchy itself, it became necessary for the Queen to speak directly to her people.

Extraordinary measures are sometimes necessary to quell the madness of crowds. When Diana, Princess of Wales’s mourners threatened to vent their angry grief on the institution of monarchy itself, it became necessary for the Queen to speak directly to her people. As the run on Northern Rock gathered momentum on Monday and panic-stricken depositors threatened to vent their anger on the government, there were only two possible responses. The more desirable option would have been to announce an immediate takeover of Northern Rock by a stronger bank which depositors would have accepted as undoubted. But that strategy carried risks of rejection even if it had been feasible at that moment — which it was not, negotiations with potential acquirers such as Lloyds TSB having ground to a halt a week earlier.

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