Jon Wood: 'We lost out because Rock was the first to suffer'

Owing to the unrealistic terms of reference imposed by the Government, the valuer has confirmed our submission to the courts: that this "compensation" scheme is a "no compensation" scheme by a Government in denial.

This is despite the valuer confirming the bank had assets exceeding its liabilities by £1.63bn, or almost £4 a share, when it was nationalised, and the Government's expectation that Northern Rock would pay back its loan in full, with interest. The Government claimed Rock needed more capital to survive, but shareholders had agreed to inject money to support it over the long term. The Government claimed Rock relied too much on wholesale funding, but the FSA said long-term wholesale funding was not a weakness, and that its short-term wholesale funding was "not an outlier".

Rock's problem was to be the first to need liquidity support during a worldwide systemic problem. That was made worse when someone leaked that support and caused a run on the bank.

The National Audit Office has uncovered that Britain's banks have received £850bn of loans and support. Yet no other shareholders in a solvent UK bank have seen their property expropriated. The Rock was singled out because the Government had not woken up to the systemic liquidity problem.

Jon Wood runs the hedge fund SRM Global