Since the last 20 years, the uncertainties in the global financial system have affected a large number of financial institutions among which the Northern Rock is also included. The institution has been bearing the losses since the last 4 years, where another reason for that could be the global recession that has veiled the whole Europe. Also, the debacle of the home mortgage industry since the 1990s is another factor for the debacle of the business of Northern Rock. The purpose of this report is to establish an authentic critique of the case study of Northern Rock retail bank. The key aims adopted in the critique will deal with those indicators that have made NR a victim of a debacle in the financial system. The report will critically analyze those aspects that have led NR to keep losing in the financial business race. The role of the credit crunch and its direct effect on NR financial performance will be discussed. The effects of the modern models of banking will be explained in the light of which an analysis about NR will be made that will explain the outcomes of the institutions in case of adopting new business banking models. The role of the credit rating agencies has also been critical in terms of the financial collapse of the NR and that will also be discussed. Another important dimension of NR consistent failure of bringing back its old legacy will be presented in this critique in which the role key policies and regulations adopted by UK financial system and more importantly Northern Rock will be explained and their spillover effects would also be explained.
The current crisis inside the business of the NR will best be understood by the consultation of the liberalization of financial markets in the UK in 1986. The financial institutions and production markets then were allowed to compete with each in a free market as well as to offer as many services or products as they wanted. The decision made by NR officials was to follow this policy and hence they started expanding their business by offering more services to the clients to catch more number of consumers to get subscribed to their services.