March 5th, 2008

Uk Banking Crisis - Nothern Rock Seeks Help From Central Bank

Northern Rock, one of Britian’s largest mortgage banks is expected to receive emergency funding from the Bank of England today for possibly more than £4 billion ($8 billions), as the mortgage bank runs out of cash and is unable to obtain credit on the interbank money market due to the ongoing liquidity squeeze and the banks own sizeable subprime mortgage book risks. As with the earlier emergency funding of barclays, the rate charged by the Bank of England is expected to be significantly higher than the 5.75% base rate, possibly around 6.75%.

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