Northern Rock, one of the UK's largest mortgage lenders, has had to take an emergency loan from the Bank of England.
News of the loan has caused Northern Rock shares to plummet by 23% in morning trading. Earlier this week, Bank of England governor, Mervyn King, wrote a letter to the Treasury Select Committee saying the Bank would provide emergency loans for lenders running into temporary difficulty as a result of the current market troubles. Analysts say the fact the BoE is willing to loan to Northern Rock indicates the company is not at threat of going into liquidation. However, the company is having difficulty borrowing from other lenders due to nervousness among banks and investors when lending to mo...
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