Bank of England bails out lender
Northern Rock, one of Britain's biggest mortgage lenders, is now its biggest credit-crunch casualties. Fortunately for them, the Bank of England is coming to the rescue. Stephen Beard reports.
Customers line up at Northern Rock branch in Bromley, southeast London (Ben Stansall/AFP/Getty Images)
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Doug Krizner: The global credit crunch has produced a great fall in the U.K. this morning. Now, all the king's horses and all the king's men are putting one of Britain's largest mortgage lenders together again.
The firm is Northern Rock, and it can no longer get the funding needed to stay in business. So the Bank of England is coming to the rescue with an emergency bail-out. More from Stephen Beard in London.
Stephen Beard: Northern Rock is by far the biggest British victim of the credit crunch. The company, with assets worth $230 billion, has been forced to go cap in hand to the Bank of England and beg for help.
Northern Rock borrows most of its money not from depositors, but from the wholesale credit markets. And they've been paralysed by the subprime liquidity crisis.
Andrew Hilton of the CSFI think tank says there could be other casualties:
Andrew Hilton: Northern Rock was a market leader in kind of dumping its individual depositors and going for wholesale money. But everybody had been trending in that direction. So to a greater and lesser extent, there are other institutions out there that are vulnerable.
E.U. finance ministers and central bankers are meeting in Portugal today and tomorrow, and top of their agenda is the global liquidity crisis.
In London, this is Stephen Beard for Marketplace.
