Why Did Northern Rock Call In The Bank Of England?
Posted on March 20, 2008 - Filed Under Uncategorized | Leave a Comment
The confirmation by the Bank of England of support for Northern Rock plc on 12 September 2007 is the first major sign of international fallout from the collapse of the US subprime mortgage lending market. In the US, lenders such as New Century Financial Corporation, the second largest subprime lender in California, have gone bankrupt. In the UK, as Northern Rock is classed as a bank, the authorities intervened in order to prevent market panic. There have been persistent rumors that several leading UK banks, including Barclays, have liquidity issues and the Bank of England wished to send a clear signal that no major bank will be allowed to fail.
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