Northern Rock has seen 60% of the deposits held at the bank withdrawn since it was forced to request emergency funding from the Bank of England. Savers have lost confidence in the bank since the news, with a total of £14 billion withdrawn, including £3 billion in just three days immediately after the news of emergency funding was revealed.
Northern Rock has borrowed around £23 billion from the Bank of England since September 13th, with that amount expected to rise further in the coming months. However, those loans must are repayable six months after the date of borrowing. The government had pledged to guarantee people’s savings, though that hasn’t stopped the mass withdrawals in the first run on a bank in over a century.
Northern Rock has been in talks with investors such as a Virgin led consortium, Cerberus and JC Flowers, though this week, one of the bank’s afflicted advisors, Blackstone, has encouraged other potential investors to come forward. Lloyds TSB had been interested in acquiring the bank, though the Bank of England rejected its request for a loan help fund its takeover of the troubled mortgage lender.
Savers Withdraw 14 Billion Pounds from Bank
Savers Withdraw 14 Billion Pounds from Bank
Fri, 16 Nov 2007
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