Page 421 - The Case Lab Book

Appendix 1

Timeline

RBS – ABN Takeover Timeline

Appendix 2

Sub-Prime

So who is to blame - the borrower, the broker or the lender? Clearly, it is partly the system
itself. US sub prime lenders were not required to perform stringent checks on borrower's
credit ratings. The result is "ninjas" - loans sold to people with "no income, no job and no
assets".

The sub prime mortgages, taken out by people in Cleveland and all over the US, have since
been sold on to investors all over the world. Everyone in the system - the brokers, the
lenders, the investment appraisers - took their cut and the returns were good. But, as it
turns out, so were the risks too.

When the mortgages went bad, the securities became worthless and the money dried up on
the markets. The result is a global credit crunch, which has been felt in Britain through the
bank run on Northern Rock.