Chairman Matt Ridley of the troubled British bank Northern Rock has stepped
down over his role in the bank's near collapse last month, the bank announced
Friday.
The time is right to accept the resignation of
Ridley, the bank said.
Bryan Sanderson, a former chairman of Standard
Chartered, would take over as chairman of the bank as soon as he has been
approved by the Financial Services Authority, the bank said.
Ridley had offered to resign in September but was
asked to remain in his post to testify before a parliamentary committee this
week.
He was accused of "damaging the good name of British
banking" by the committee of MPs.
Ridley told the Treasury Select Committee on Tuesday
that the bank had been hit by "wholly unexpected" events and he defended the way
he and his colleagues had been running the bank.
"We were subject to a completely unprecedented and
unpredictable closure of the world credit markets," he said, defending the
bank's policy of borrowing large sums of money on the financial markets to lend
as mortgages to house buyers.
Northern Rock's business model proved vulnerable when
the summer's turmoil on financial markets due to problems in the US sub prime
mortgage market made banks more reluctant to lend to each other.
Northern Rock was forced to seek emergency funding
from the Bank of England. When this was made public, thousands of savers queued
to withdraw money totaling more than 2 billion pound sterling, which was 8
percent of deposits the bank held.
Northern Rock has until February next year to assess
options for its future, including a sale. So far it has received approaches from
several groups including a consortium led by Richard Branson's Virgin
Group.
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