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Shares in one of the UK's largest mortgage lenders, Northern Rock, were down by 31% after the Bank of England decided to offer it emergency funding.
But experts say it does not mean Northern Rock, which has £113bn in assets, is in danger of going bust.
Shares in UK buy-to-let mortgage lender Paragon Group slumped as much as 26% as fears deepened over the ability of banks to finance their loans.
Originally posted by ChorltonNorthern Rock has sufficient assets, The BoE wouldnt have loaned it the cash if it didnt, its just leant out a lot of money and is short of physical cash.
Originally posted by niteboy82
Judging by those lines, they're going to be a little bit shorter on physical cash by the end of the day. :shk:
How long are loans going to be able to continue to keep the market afloat before it all goes down the tubes?
Originally posted by Chorlton
As stated, the Bof E wouldnt have dished out money to it, if it didnt have the assets to back up the loans.
Originally posted by bobafett
It's down by 29% now. This is like a self fulfilling prophecy, people predict problems, so people withdraw, causing more problems, causing more people to withdraw and so on. This may only be the start too, a lot of people may be at work right now, but tomorrow is saturday, there may be an even bigger run then.
Originally posted by infinite
The last bank that had to be bailed out by the Bank of England was the 1970s.
Originally posted by Paul
Yet until banks own up as to who has lost what—difficult, since many are struggling to value what they own—even the best-educated guesses are shots in the dark. “We're pushing around information, but nobody has any idea of what's going on,” says one large holder of bank stocks, head down in a stack of analysts' reports. “We can only hope that the Bank of England knows more, or that these banks are too big to be allowed to fail.” Which is precisely the sort of thinking that got banks into this mess in the first place.
Originally posted by bobafett
It's down by 29% now. This is like a self fulfilling prophecy, people predict problems, so people withdraw, causing more problems, causing more people to withdraw and so on.
A quiet crisis: The money markets smell a wounded bank
The gap between the rates banks pay to borrow money for three months, and that paid by governments, is at a 20-year high, suggesting that someone somewhere is believed to be in financial trouble.
the level of turmoil in the money markets suggests investors are seriously worried about a financial company going bust. Wouldn’t that have an enormous effect on economic confidence? And wouldn’t it be a major market event, given the importance of financial sector profits and the industry’s weight in global stockmarkets?