Failure After Failure

DARREN STAPLES / REUTERS

ROCKED: Taxpayers' exposure to the bank may amount to $200 billion

For some years now, financial services have been the U.K.'s biggest industry. And, in many ways, London has become the world's leading financial center. With finance a global growth industry, this is a great strength to have. But it is a uniquely mobile industry, and one in which reputation is particularly important. So the still unresolved failure of the U.K. mortgage bank, Northern Rock, is more damaging for Britain than a similar disaster would be for any other country.

Bank failures are bound to happen from time to time. But unlike failures in other industries, a...

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