Northern rock

it has nothing to do with our mortgages, it's a lack of liquidity to provide further lending, as our main source of funding has stopped.

most banks get there funding through savings but we source it through interbank loans and securities, because of the US issue banks arent lending to each other any more and it's hit us hard...

bingo


most other posts above are either speculation, bollox or both

i will also add that the savings withdrawls people are making will make very little difference to NR

NR is a morgage based business

their loan book is MASSIVE

it is a huge ASSET, which far far outweighs in £££s the amount of savings deposited

if it is actually in any trouble, another bank will buy it out, which may mean some job losses up here, but no affect to customers

i will dance naked down northumberland street if they go bust

sorry vin,

i dont agree with you.

seems a really naive statement to make.

northern rocks business is fucked. its a big shame for the north east but you have to be realistic, regardless of how big you think their mortgage power is they are totally fucked.

would you buy a mortgage or put money in?

It was certainley mentioned in the newspaper (Guardian) I read.

For more details please read:

Barclays emerged last night as the financial institution that borrowed £1.6 billion from the Bank of England’s credit facility – the second time this month that the high street bank has had to obtain emergency funding from the UK’s lender of last resort.

Barclays said that a technical glitch with the market settlement system forced it to turn to the central bank for funds. The identity of the bank with a £1.6 billion shortfall galvanised the City yesterday, coming amid renewed concerns about the willingness of banks to lend to one another.

Concern over solvency after the credit crisis have sent the cost of some borrowing between banks soaring. The London Interbank Offered Rate (Libor), at which banks lend between each other for 90 days, rose yesterday to 6.63 per cent. With the base rate expected to stay at 5.75 per cent over the next three months, analysts said that the huge premium for borrowing was a sign that banks were refusing on a huge scale to lend to one another, despite the clear opportunity for profit.

The loan on Wednesday night was the third-largest borrowing from the Bank of England this year, exceeded only by a £3.9 billion loan in June and a £1.9 billion loan in July. The Bank has granted short-term credit worth almost £10 billion this year.


Barclays accessed the Bank’s so-called standby facility after a mal-function at Crest caused the electronic settlement system’s interface with the Bank of England to fail at 2.30pm on Wednesday. When the system restarted at 3.30pm, Barclays, one of the UK’s biggest clearing banks, saw that it had a sterling shortfall.

All banks must ensure that their Bank of England accounts are in the black by 4.20pm. Sources said that Barclays tried to borrow in the wholesale market but failed, in part because of other banks’ reluctance to lend at any cost. Potential lenders were also hampered by their own problems with Crest, which made it difficult for them to see whether they had surplus cash to offload.

A statement from Barclays last night played down the significance of the borrowing, saying: “At the end of the day there was excess liquidity in the money markets where bank reserves were larger than bank borrowings. There are no liquidity issues in the UK markets. Barclays itself is flush with liquidity. In these challenging times the dramatisation of such situations is of no help to markets, their members or their customers.”

A spokesman for Euroclear, the owner of the Crest system, said yesterday that no client had reported any settlement problems. "We were back to normal within an hour," the spokesman said. "To ease clients' end-of-day transaction processing, we extended our deadline by an hour.”

It is not unusual for banks to use the Bank of England’s facility, but tension any settlement problems. “We were back to normal within an hour,” the spokesman said. “To ease clients’ end-of-day transaction processing, over the use of emergency credit has mounted in the wake of the turmoil gripping the international credit markets and the expectation that a medium-sized banking player might struggle to raise short-term finance.

A number of British banks have been hit as investors desert the markets for asset-backed commercial paper and syndicated leveraged loans.

This month Barclays was forced to borrow £314 million from the Bank of England after HSBC could not process a last-minute request for a loan in time for Barclays to settle its account at the Bank.

Speculation yesterday that Barclays was behind the latest borrowing sent the bank's shares down 21/2p to 5971/2p each. The Bank of England's facilty lends at a penalty rate of 6.75 per cent. The Bank has asked banks not to talk about their use of the facility.

As above, this was a couple weeks ago now altho not quite the same as NR - http://news.bbc.co.uk/1/hi/business/6971731.stm

danny they're not like. all thats happening is that banks arent loaning each other money and they've decided to borrow off the bank of england instaead of each other, which they do all the time. the only people that think they are screwed are the same people that are taking all their money out....the people that know sod all about how the financial markets work.

i would say however, that as this is happening to nr first before all the others is a sign of things to come with the housing market. putting it bluntly, i wouldnt be buying a house just yet.

Bought 4k worth of Northern rock shares yesterday made near enough £600 today

Shrewd move.

thats exactly what i was saying i would've done if i had the cash. i reckon u'll nearly double ya money within 6 weeks.

our lasses mum has some STILL from the original floation - whats peoples thoughts on their prices now?

I have some from the float too. I didn't pay for them in the first place and so whatever they are worth is more than I paid for them.
I do think it is very bad for the north east that this has happened. They were big supporters of charity and that will all go if they are taken over. they sponsored loads of sport too. Its going to be bad for the people who were relying on that money.
The people who are still queueing for hours are bonkers though since the government has guaranteed their money won't be lost

Im suprised there hasnt been news of people getting mugged outside Northern Rock branches as people are going in and withdrawing such large amounts of money.

I'm still going ahead with the mortgage application we have with them.

If I had any savings i would of bought shares in them yesterday aswell.

The mortgages are still coming in pretty much as they were, people have been calling all day to reopen accounts

:clap:

things seem to be a lot better today which is good.