Rock chiefs say they were victims of circumstance

Despite overseeing the first run on a UK bank for over a century, Northern Rock's top executives have told MPs that they did nothing wrong.

During a stormy meeting with MPs on the Treasury Select Committee, the bank's chief, Adam Applegarth (pictured), and three other executives denied they were personally responsible for the crisis last month, when tens of thousands of customers laid siege to Northern Rock branches to withdraw their savings. In total, more than £2bn was taken out.

Mr Applegarth said Northern Rock's business model – lending large sums sourced from global money markets rather than cash deposits – had been tested against a possible 40 per cent fall in UK house prices. "What wasn't stress-tested was the event deemed implausible – of the global markets freezing up overnight."

Likewise, the bank's chairman, Matt Ridley, said the run had been caused by "wholly unexpected" events.

In an aside, Mr Applegarth laid part of the blame for the panic at the door of the BBC – for reporting that Northern Rock had asked the Bank of England for an emergency loan.

When pressed by MPs on whether he should resign, Mr Ridley said he would do so only if his fellow executives asked him to. By Friday, time was called, and Mr Ridley tendered his resignation. Mr Applegarth may soon follow him out the door if Northern Rock is taken over.