September 14, 2007
Northern Rock gets emergency support
One of the largest mortgage lenders in the UK has had to go to the Bank of England for emergency financial support.
This does not mean that the bank is in any financial trouble or that the bank is going to go bust. What it does show is the effect that the mortgage crisis in the USA has had on the market over here and elsewhere.
All banks are having problems getting funding on mortgages these days, and the problem that faces Northern Rock is that their business is primarily made up of mortgages, they do little other banking services which is the main reason for their current predicament.
This could be the beginning of a long drawn out battle for the banks, which really depends on the market in the states; another crisis could spell even more problems over here.
Source [BBC News]
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